11-K

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, 2007

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

Penford Corporation
Savings and Stock Ownership Plan

(Full title of the plan)

Penford Corporation
7094 South Revere Parkway
Centennial, Colorado 80112

(Name of issuer and address of issuer’s principal executive office)

Penford Corporation
Savings and Stock Ownership Plan

Index to Financial Statements and Supplemental Schedules

Year Ended August 31, 2007

Report of Independent Registered Public Accounting Firm	3
Audited Financial Statements:
Statements of Net Assets Available for Benefits	4
Statement of Changes in Net Assets Available for Benefits	5
Notes to Financial Statements	6
Supplemental Schedules:
Schedule H, Line 4(i) – Schedule of Assets (Held at End of Year)	13
Schedule H, Line 4(j) – Schedule of Reportable Transactions	14
Signatures	15
EXHIBIT INDEX
Exhibit No. 23: Consent of Ehrhardt Keefe Steiner & Hottman PC
Consent of Independent Registered Public Accounting Firm

2

Report of Independent Registered Public Accounting Firm

Plan Administrator, Committee, and Participants
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, 2007 and 2006, and the statement of changes in net assets available for benefits for the year then ended August 31, 2007. 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, 2007 and 2006 and the changes in net assets available for benefits for the year ended August 31, 2007, 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 schedules are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are 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 schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements, and, in our opinion, are 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 

January 31, 2008
Denver, Colorado

3

Penford Corporation Savings and Stock Ownership Plan

Statements of Net Assets Available for Benefits

	August 31,
	2007		2006
Assets
Investments, at fair value:
Common trust funds	$	32,282,957	$	24,818,269
Common stock		11,392,912		8,800,928
Participant loans		356,692		304,440
		44,032,561		33,923,637
Receivables:
Employer contribution receivable		—		30,552
Participant contribution receivable		—		64,084
Accrued interest and dividends		45,701		47,809
Due from broker for securities sold		19,720		—
Total receivables		65,421		142,445
Total assets		44,097,982		34,066,082
Liabilities
Accrued expenses		54,265		20,510
Net assets available for benefits	$	44,043,717	$	34,045,572

See accompanying notes.

4

Penford Corporation Savings and Stock Ownership Plan

Statement of Changes in Net Assets Available for Benefits

Year Ended August 31, 2007

Additions
Investment income:
Net appreciation in fair value of investments	$	8,891,645
Interest and dividends		400,100
		9,291,745
Contributions:
Employer		889,516
Participants and rollover		1,947,258
		2,836,774
Total additions		12,128,519
Deductions
Benefits paid to participants		1,839,616
Administrative expenses		290,758
Total deductions		2,130,374
Net increase		9,998,145
Net assets available for benefits
Beginning of year		34,045,572
End of year	$	44,043,717

See accompanying notes.

5

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). An amendment to the Plan was made in fiscal year 2007.

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 qualified retirement plans. At any time, but limited to once per month, 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 2007.

The Plan provides for a $1,000 contribution to new union employees (hired during the period beginning August 1, 2004, and ending July 31, 2009) subject to the most recent collective bargaining agreement. The one time contribution is 100% vested.

6

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

1. Description of the Plan (continued)

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.

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. 

7

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

1. Description of the Plan (continued)

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 5.0% to 10.5% commensurate with local prevailing rates as determined by the Plan’s Administrative Committee and mature at various dates through 2021. 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

8

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

1. Description of the Plan (continued)

provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.

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.

9

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

2. Significant Accounting Policies (continued)

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.

Additionally, some investments held by Russell Investments 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 transaction 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.

3. Investments

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

	August 31,
	2007			2006
Penford Corporation common stock*	$	9,595,493		$	5,656,972
Penwest Pharmaceuticals Co. common stock		1,797,419	**		3,143,956
Frank Russell Trust Company:
Short-Term Investment Fund		6,060,463			5,217,685
Global Aggressive Balanced Fund		11,003,087			10,388,164
International Fund		4,108,734			1,820,547
Global Equity Fund		6,149,180			4,670,682

*	Includes nonparticipant-directed investments. See Note 4 for further detail.
**	Investment is not greater than 5% of net assets as of August 31, 2007 but is included as amount was greater than 5% of net assets as of August 31, 2006.

10

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

3. Investments (continued)

During the year ended August 31, 2007, the Plan’s investments (including investments bought and sold, as well as held, during the year) appreciated in fair value as determined by quoted market prices as follows:

	Net Realized
	and Unrealized
	Appreciation
	in Fair Value
	of Investments
Common trust funds	$	3,243,678
Common stock		5,634,425
	$	8,878,103

4. Nonparticipant-Directed Investments

The Penford Corporation Stock Fund and the PPCO Stock Fund both contain amounts, representing assets held under the Employee Stock Ownership Plan (“ESOP”) portion of the Plan. Effective April 4, 2006, any participant may elect to diversify any amount of PPCO Stock held in his or her ESOP accounts, therefore the entire balance is participant-directed. A portion of the Penford Corporation Stock Fund is subject to certain ESOP diversification rules, and therefore, may be restricted with regard to participant investment direction. Accordingly, we are considering the Penford Corporation Stock funds held in the ESOP portion of the Plan to be nonparticipant-directed. Information about the net assets and the significant components of changes in net assets related to the nonparticipant-directed investments is as follows:

	August 31
	2007		2006
Investments, at fair value:
Penford Corporation common stock	$	3,058,257	$	1,489,358

	Year Ended
	August 31,
	2007
Changes in net assets:
Net appreciation in fair value of investments	$	1,644,418
Interfund transfers		(8,080	)
Benefits paid to participants		(67,439	)
	$	1,568,899

11

Penford Corporation Savings and Stock Ownership Plan

Notes to Financial Statements

5. 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.

6. 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.

12

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, 2007

			(c)
		(b)	Description of Investment Including
		Identity of Issue, Borrower,	Maturity Rate, Rate of Interest, Par,	(d)		(e)
(a)		Lessor, or Similar Party	or Maturity Value	Cost		Current Value
		Common Trust Funds
	*	Russell Trust Company	6,060,463 units of the Commingled			$	6,060,463
			Employee Benefit Funds Trust Short-Term Investment Fund		(1)
	*	Russell Trust Company	294,515 units of the Commingled				11,003,087
			Employee Benefit Funds Trust Global Aggressive Balanced Fund		(1)
	*	Russell Trust Company	32,869 units of the Commingled				1,267,119
			Employee Benefit Funds Trust Growth Fund		(1)
	*	Russell Trust Company	50,220 units of the Commingled				1,759,189
			Employee Benefit Funds Trust Small Capitalization Fund		(1)
	*	Russell Trust Company	87,944 units of the Commingled				4,108,734
			Employee Benefit Funds Trust All International Markets Fund		(1)
	*	Russell Trust Company	22,911 units of the Commingled				625,923
			Employee Benefit Funds Trust Domestic Diversified Fund		(1)
	*	Russell Trust Company	64,655 units of the Commingled				1,309,262
			Employee Benefit Funds Trust Value Fund		(1)
	*	Russell Trust Company	115,153 units of the Commingled				6,149,180
			Employee Benefit Funds Trust Global Equity Fund		(1)
							32,282,957
		Common Stock
	*	Penford Corporation	271,827 common shares	$	4,030,522		9,595,493
		Penwest Pharmaceuticals Co.	145,540 common shares		(1)		1,797,419
							11,392,912
	*	Participant Loans	Interest rates range from 5.00% to 10.50% maturing through 2021, collateralized by participant accounts		0		356,692
						$	44,032,561

*	Denotes party-in-interest to the Plan.
(1)	Cost information is omitted as investments are participant directed.

13

Penford Corporation Savings and Stock Ownership Plan

Schedule H, Line 4(j)—Schedule of Reportable Transactions

EIN: 91–1221360 Plan Number: 003

For the Year Ended August 31, 2007

								(h)
								Current
								Value of
(a)		(c)		(d)				Asset on		(i)
Identity of Party Involved	(b)	Purchase		Selling		(g)		Transaction		Net Gain
and Description of Asset	Description of Transaction	Price		Price		Cost of Assets		Date		or (Loss)
Category (iii) – A series of transactions in excess of 5% of Plan assets.
Russell Trust Company	Penford Corporation common stock		—	$	3,900,963	$	2,109,849	$	3,900,963	$	1,791,114

There were no Category (i), (ii), or (iv) reportable transactions during the year ended August 31, 2007.

Columns (e) and (f) have not been presented, as this information is not applicable.

14

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 13, 2008	By:	/s/ Steven O. Cordier
		Steven O. Cordier
		Penford Corporation
		Senior Vice President and Chief Financial Officer

15

EXHIBIT INDEX

No.	Description
23	Consent of Independent Registered Public Accounting Firm

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements No. 33-37553, No. 2-94198 and No. 33-88946 on Form S-8 of Penford Corporation of our report dated January 31, 2008 with respect to the financial statements and supplemental schedules of the Penford Corporation Savings and Stock Ownership Plan, which appears in this Form 11-K.

February 12, 2008	/s/ Ehrhardt Keefe Steiner & Hottman PC
Denver, Colorado	EHRHARDT KEEFE STEINER & HOTTMAN PC