UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 11-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2008

OR

o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 0-11488

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

Penford Corporation
Savings and Stock Ownership Plan

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Penford Corporation
7094 South Revere Parkway
Centennial, Colorado 80112

Penford Corporation
Savings and Stock Ownership Plan

Index to Financial Statements and Supplemental Schedule

Year Ended August 31, 2008

Report of Independent Registered Public Accounting Firm	1
Audited Financial Statements:
Statements of Net Assets Available for Benefits	2
Statement of Changes in Net Assets Available for Benefits	3
Notes to Financial Statements	4
Supplemental Schedule:
Schedule H, Line 4(i) — Schedule of Assets (Held at End of Year)	11
Signatures	12
Exhibit No. 23: Consent of Ehrhardt Keefe Steiner & Hottman PC
EX-23

Report of Independent Registered Public Accounting Firm

Plan Administrator
Penford Savings and Stock Ownership Plan
Centennial, Colorado

We have audited the accompanying statements of net assets available for benefits of the Penford Savings and Stock Ownership Plan (the “Plan”) as of August 31, 2008 and 2007, and the statement of changes in net assets available for benefits for the year ended August 31, 2008. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform our audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes assessing the accounting principals used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of August 31, 2008 and 2007 and the changes in net assets available for benefits for the year ended August 31, 2008, in conformity with accounting principals generally accepted in the United States of America.

Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ Ehrhardt Keefe Steiner & Hottman PC  

EHRHARDT KEEFE STEINER & HOTTMAN PC 

February 25, 2009
Denver, Colorado

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Penford Corporation Savings and Stock Ownership Plan

Statements of Net Assets Available for Benefits

	August 31,
	2008		2007
Assets
Investments, at fair value:
Common trust funds	$	31,143,747	$	32,282,957
Common stock		6,539,096		11,392,912
Participant loans		403,454		356,692
		38,086,297		44,032,561
Receivables:
Accrued interest and dividends		41,548		45,701
Unsettled investment sales		—		19,720
Total receivables		41,548		65,421
Total assets		38,127,845		44,097,982
Liabilities
Accrued expenses		21,238		54,265
Unsettled investment purchase		435,637		—
		456,875		54,265
Net assets available for benefits	$	37,670,970	$	44,043,717

See accompanying notes.

2

Penford Corporation Savings and Stock Ownership Plan

Statement of Changes in Net Assets Available for Benefits

Year Ended August 31, 2008

Additions
Investment income:
Net depreciation in fair value of investments	$	(7,699,144	)
Interest and dividends		455,088
		(7,244,056	)
Contributions:
Employer		1,000,064
Participants and rollover		2,183,068
		3,183,132
Total additions		(4,060,924	)
Deductions
Benefits paid to participants		1,973,660
Administrative expenses		338,163
Total deductions		2,311,823
Net decrease		(6,372,747	)
Net assets available for benefits
Beginning of year		44,043,717
End of year	$	37,670,970

See accompanying notes.

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Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

1. Description of the Plan

The following description of the Penford Corporation Savings and Stock Ownership Plan, as amended, (the Plan) provides only general information. Participants should refer to the actual Plan document or the Summary Plan Description for a more complete description of the Plan’s provisions. Copies are available from the Plan’s Administrative Committee.

General

The Plan is a defined-contribution plan available to all U.S. employees, including part-time employees, who have worked a specified period of time for Penford Corporation (the Company), excluding however, certain employees whose terms of service are covered by a collective bargaining agreement unless otherwise agreed to by the bargaining parties. Currently, all union employees are eligible to participate in the Plan. Employees who have completed one month of service with the Company are eligible to participate in the Plan. The Plan was created effective September 1, 1984. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Effective September 1, 2007, the Plan was amended to incorporate amendments to Code 415 regulations.

Contributions

Participants may contribute a maximum of 16% of their eligible annual compensation. Participants may elect to invest their contribution in any of the Plan’s fund options, with the exception of the Penwest Pharmaceuticals Co. (PPCO) Stock Fund. Following the initial investment in the PPCO Stock Fund on September 1, 1998, which was a result of the tax-free distribution of the Company’s pharmaceuticals subsidiary, Penwest Pharmaceuticals Co., no additional investments are allowed to this fund. The Plan also permits rollover contributions from other retirement plans. At any time, participants have the opportunity to change their investment option previously elected.

The Company makes matching contributions to the Plan equal to 100% of the first three percent of the participant’s compensation that he or she contributes to the Plan as deferral contributions, plus 50% of the next three percent of the participant’s compensation that is contributed to the Plan as deferral contributions. The match dollars are invested in the funds to which the participant directs his contributions. The Company may also make annual discretionary profit-sharing contributions to the Plan. Profit-sharing contributions are allocated based on participant compensation. There were no profit-sharing contributions paid to the Plan for fiscal year 2008.

The Plan provides for a $1,000 contribution to new union employees (those hired on or after August 1, 2004) subject to the most recent collective bargaining agreement. The one time contribution is 100% vested. The Plan was amended effective January 1, 2009.

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Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

The amendment adds that for calendar years 2009, 2010 and 2011, the Company will make a contribution, equal to 2% of an employee’s adjusted earnings, as defined, to the accounts of those employees who were eligible pursuant to the terms of the collective bargaining agreement. Such contributions shall be immediately 100% vested. The contribution shall be reduced by $1,000 for the year that the employee receives the one-time $1,000 contribution described above.

At the discretion of the Board of Directors, employer profit sharing contributions can be applied to either the ESOP component of the Plan or to the Profit Sharing Account. The Profit Sharing account is participant-directed such that participants can choose among the various investment alternatives provided by the Plan.

Participant Accounts

Individual accounts are maintained for all Plan participants. These accounts reflect participants’ contributions and related Company matching and profit-sharing contributions to the Plan as well as allocations of earnings or losses on the Plan’s investments. Allocations of Plan earnings are based on each participant’s account balance.

Vesting

Participants are immediately vested in their contributions, plus actual earnings thereon. Participants in the employ of the Company on or after September 1, 2001 are immediately vested in employer matching contributions, plus actual earnings thereon. Participants who terminated employment prior to September 1, 2001 were subject to the previous vesting schedule of 20% vesting each year over a five-year period with respect to employer matching contributions. All employer profit sharing contributions are also subject to a vesting schedule of 20% per year over a five-year period.

Payment of Benefits

Distributions to terminated participants for vested account balances are made in cash, unless elected to be made in Penford Corporation common stock, as soon as practicable after termination. Participants are eligible for distribution of 100% of their vested account balance, including both participant and employer contributions, as soon as practicable after their normal or postponed retirement date, at death, or at total disability, as defined by the Plan document. Participants with a vested balance of $1,000 or more may elect to maintain their account balance in the Plan until otherwise required to receive a distribution. Benefits are recorded when paid.

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Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

Hardship Withdrawals

Participants are entitled to request a hardship withdrawal of all or a portion of the balance in their 401(k) Contribution Account, excluding any income earned on their account after November 30, 1988. Such a withdrawal must qualify as an immediate and heavy financial need as defined in the Plan, and the amount requested must not exceed the amount necessary to meet such need.

Participant Loans

Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan terms range from one to five years or up to 15 years for the purchase of a primary residence. The loans are secured by the balance in the participant’s account and bear interest at rates that range from 5% to 10.5% commensurate with local prevailing rates as determined by the Plan’s Administrative Committee and mature at various dates through 2023. Principal and interest are paid ratably through payroll deductions.

Diversification of ESOP Accounts

The Plan was amended to provide that, effective for Plan Years beginning on or after September 1, 2007, all participants may elect to diversify an amount up to 100% of the value the Company Stock allocated to their ESOP account.

In general, the following provisions applied for Plan Years beginning prior to September 1, 2007: Participants who are at least age 55 with at least 10 years of employment may elect to diversify a portion of their ESOP accounts. Diversification is offered to each eligible participant over a six-year period. In each of the first five Plan years of the period, a participant may diversify up to 25 percent of the value of the Company stock allocated to his or her ESOP accounts. In the sixth year and all subsequent plan years, a participant may diversify up to 50 percent of the value of the Company stock allocated to his or her ESOP accounts. Effective for Plan Years beginning on or after April 4, 2006, a participant who has reached the sixth Plan Year in the Election Period, or any subsequent Plan Year, may elect to diversify an amount up to 100% of the value of the Company stock allocated to his or her ESOP accounts. Also effective April 4, 2006, all participants could generally elect to diversify an amount up to 10% of the value of the Company Stock allocated to his or her ESOP accounts each Plan quarter.
Any participant may elect to diversify any amount of PPCO Stock held in his or her ESOP accounts at any time.

Plan Termination

Although the Company has not expressed any intent to do so, it has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.

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Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

2. Significant Accounting Policies

Basis of Presentation

The accounting records of the Plan are maintained on the accrual basis of accounting.

Investment Valuation and Income Recognition

Assets of the Plan are invested in ten funds, including eight common trust funds and two common stock funds. The common stock funds are comprised of the Company’s common stock and the common stock of PPCO to the extent participants received PPCO shares in connection with the spin-off of PPCO in 1998. The unit value of each common trust fund is stated at fair value, determined on a daily basis by reference to the market values of the underlying assets.

Investments in common stock are stated at fair value based on closing market prices on the last business day of the year.

Participant loans are recorded at their outstanding balances, which approximate fair value.

Purchases and sales of investments are recorded on the trade dates. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Expenses

The Plan’s administrative expenses are paid by either the Plan or the Company, as provided by the Plan document.

Risks and Uncertainties

The Plan provides for various investment options. Investment securities are exposed to various risks, such as interest rate, market, and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in interest rates, market values and credit ratings in the near term could materially affect the value of participants’ account balances, and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits.

7

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

Additionally, some investments held by the Plan are invested in the securities of foreign companies, which involve special risks and considerations not typically associated with investing in U.S. companies. These risks include devaluation of currencies, less reliable information about issuers, different securities transactions clearance and settlement practices and possible adverse political and economic developments. Moreover, securities of many foreign companies and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies.

Recently Issued Accounting Pronouncement

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 157, Fair Value Measurements. This statement defines fair value, establishes a fair value hierarchy to be used in accounting principles generally accepted in the United States of America and expands disclosures about fair value measurements. Although this statement does not require any new fair value measurements, the application could change current practice. The statement is effective for fiscal years beginning after November 15, 2007 on a prospective basis. The Plan is currently evaluating the impact of this new standard and does not believe the adoption of SFAS No. 157 will have a material effect on the financial statements.

8

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

3. Investments

Individual investments whose fair value was in excess of 5% of Plan net assets at year-end were as follows:

	August 31,
	2008		2007
Penford Corporation common stock	$	6,046,887	$	9,595,493
Frank Russell Trust Company:
Short-Term Investment Fund		8,629,585		6,060,463
Global Aggressive Balanced Fund		9,768,607		11,003,087
All International Markets Fund		3,201,788		4,108,734
Global Equity Fund		5,332,691		6,149,180

During the year ended August 31, 2008, the Plan’s investments (including investments bought and sold, as well as held, during the year) depreciated in fair value as determined by quoted market prices as follows:

	Net Realized
	and Unrealized
	Depreciation in Fair Value
	of Investments
Common trust funds	$	(2,556,001	)
Common stock		(5,143,143	)
	$	(7,699,144	)

9

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

4. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated April 1, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan has been amended since receiving the determination letter. However, the plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt.

5. Party-in-Interest

Certain Plan assets are invested in common trust funds managed by the Trustee as defined by the Plan. Assets are also invested in Company stock and former Company stock, also managed by the Trustee as defined by the Plan. Investments in the common trust funds and in Company stock qualify as transactions with a party-in-interest.

10

Penford Corporation Savings and Stock Ownership Plan

Schedule H, Line 4(i)—Schedule of Assets (Held at End of Year)

EIN: 91-1221360 Plan Number: 003
August 31, 2008

		(c)
		Description of Investment
	(b)	Including Maturity Rate, Rate
	Identity of Issue, Borrower,	of Interest, Par, or Maturity	(e)
(a)	Lessor, or Similar Party	Value	Current Value
	Common Trust Funds
*	Russell Trust Company	8,629,585 units of the Commingled Employee Benefit Funds Trust Short-Term Investment Fund	$	8,629,585
*	Russell Trust Company	281,922 units of the Commingled Employee Benefit Funds Trust Global Aggressive Balanced Fund		9,768,607
*	Russell Trust Company	38,351 units of the Commingled Employee Benefit Funds Trust Growth Fund		1,364,532
*	Russell Trust Company	39,722 units of the Commingled Employee Benefit Funds Trust Small Capitalization Fund		1,247,257
*	Russell Trust Company	79,845 units of the Commingled Employee Benefit Funds Trust All International Markets Fund		3,201,788
*	Russell Trust Company	27,141 units of the Commingled Employee Benefit Funds Trust Domestic Diversified Fund		759,678
*	Russell Trust Company	48,645 units of the Commingled Employee Benefit Funds Trust Value Fund		839,609
*	Russell Trust Company	112,694 units of the Commingled Employee Benefit Funds Trust Global Equity Fund		5,332,691
				31,143,747
	Common Stock
*	Penford Corporation	364,051 common shares		6,046,887
	Penwest Pharmaceuticals Co.	133,390 common shares		492,209
				6,539,096
*	Participant Loans	Interest rates range from		403,454
		5.00% to 10.50% maturing through 2023, collateralized by participant accounts
			$	38,086,297

• Denotes party-in-interest to the Plan.

11

SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

	Penford Corporation Savings and Stock Ownership Plan
February 26, 2009	By:	/s/ Steven O. Cordier
		Steven O. Cordier
		Penford Corporation

Senior Vice President and Chief Financial
Officer

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