It's a happy time for thirteen-year-old Timmy Unterkanz, who, upon entering the eighth grade, is no longer bullied and has the friendship of fellow eight-grader Kelly Monahan, ol' J.T. Atkins, Pedro the donkey, and all the Crabapple Farm animals including Pedro's son, Nacho the mule. However, things take a turn for the worse when Pedro, Timmy's most trusted confidante, dies from illness. The tragedy triggers a chain of events that brings a ruthless banker to the farm, threatening to foreclose on everything Mr. Atkins owns.

To make matters worse, Timmy notices Kelly spending time with a high-school boy which makes him sick with jealously and despair. But with the help of Nacho, a newly adopted donkey named Juanita, and a little bit of magic, Timmy reunites with Kelly, and the group of friends desperately fights to save Crabapple Farm. With time running out and the banker bearing down on Mr. Atkins and his farm, a label on a lemon crate in Mr. Atkins' kitchen triggers an idea: When life throws you lemons, make lemonade.