**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington****,****D.C.********20549**

**Form 10-Q**

**(Mark one)**

| X |  | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934** |
|---|--|----------------------------------------------------------------------------------------------|

|                                                          |
|----------------------------------------------------------|
| **For the quarterly period  ended****November 27, 2004** |
| **or**                                                   |

|                    |  |                                                                                               |
|--------------------|--|-----------------------------------------------------------------------------------------------|
|     |  | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934** |

|                                                                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **For the transition  period from       ___      to       ___    .** |
| ** **                                                                                                                                                               |

**Commissionfile number 333-115164** 

**U.S.****PREMIUM BEEF, LLC**

*(Exact name of registrant as specified in its charter)*

| **DELAWARE**                                                            |  | **20-1057414**                                |
|-------------------------------------------------------------------------|--|-----------------------------------------------|
| **(State  or other jurisdiction of****incorporation  or organization)** |  | **(I.R.S.  employer	identification  number)** |

**12200  North Ambassador Drive********Kansas  City****,****MO********64163********(Addressof principal executive offices)** **Telephone:(866) 877-2525****(Registrant'stelephone number, including area code)**

 Indicate bycheck mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrantwas required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days. Yes X No     

Indicate by check mark whether the registrantis an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes    No X

There is no marketfor the Registrant's equity.  As of January 3, 2005,there were 691,845 Class A units and 691,845 Class B unitsoutstanding.     

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**TABLE OF CONTENTS**

** **

| **PART I**   | **FINANCIAL INFORMATION**                                                                                       |
|--------------|-----------------------------------------------------------------------------------------------------------------|
|              |                                                                                                            |
| Item 1.      | Financial Statements.                                                                                           |
|              |                                                                                                            |
| Item 2.      | Management's Discussion and Analysis of Financial  Condition and Results of Operations.     |
|         |                                                                                                            |
| Item 3.      | Quantitative and Qualitative Disclosures About Market Risk                                                      |
|              |                                                                                                            |
| Item 4.      | Controls and Procedures.                                                                                        |
|              |                                                                                                            |
|              |                                                                                                            |
| **PART II.** | **OTHER INFORMATION**                                                                                           |
| ** **   | ** **                                                                                                      |
| Item 1.      | Legal Proceedings.                                                                                              |
|              |                                                                                                            |
| Item 2.      | Unregistered Sales of Equity Securities and Use of  Proceeds.                                                   |
|              |                                                                                                            |
| Item 3.      | Defaults Upon Senior Securities.                                                                                |
|              |                                                                                                            |
| Item 4.      | Submission of Matters to a Vote of Security Holders.                                                            |
|              |                                                                                                            |
| Item 5.      | Other Information.                                                                                              |
|              |                                                                                                            |
| Item 6.      | Exhibits.                                                                                                       |
|              |                                                                                                            |
|              | Signatures.                                                                                                     |

                                                                                                                                                                                                                                                                                                                                

Unless the context indicates or otherwise requires, theterms "the Company", "we", "our" and "us" refer to U.S. Premium Beef, LLC(formerly known as U.S. Premium Beef, Ltd.) and its consolidated subsidiaries.As used in this report, the term "NBP" refers to National Beef Packing Company,LLC (formerly known as Farmland National Beef Packing Company, LP), a Delawarelimited liability company, and "USPB" refers to U.S. Premium Beef, LLC(formerly known U.S. Premium Beef, Ltd.) prior to consolidation. 

**                                                                                                                                                               **

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** **

**PART I.  FINANCIAL INFORMATION**

** **

**Item 1.  Financial Statements.    **

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**U.S. PREMIUM BEEF, LLC ANDSUBSIDIARIES****Consolidated Balance Sheets**(in thousands)

|                                                                                                                                               |                       |               |                |               |
|-----------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|---------------|----------------|---------------|
|                                                                                                                                               | **November 27,**      |               | **August 28,** |
| **Assets**                                                                                                                                    | ** 2004**        | ** **    | **2004**       |
|                                                                                                                                               | ** (unaudited)** |               |                |
| Current  assets:                                                                                                                         |                       |               |                |               |
|      Cash  and cash equivalents                                                                                           | $                     | 48,347   |                | 43,611   |
|      Accounts  receivable, less allowance for returns and doubtful                                                        |                       |               |                |               |
|           accounts  of $5,803 and $5,614 in 2005 and 2004, respectively                     |                       | 162,088  |                | 177,614  |
|      Due  from affiliates                                                                                                 |                       | 1,718    |                | 2,873    |
|      Other  receivables                                                                                              |                       | 2,920    |                | 4,513    |
|      Inventory                                                                                                            |                       | 76,359   |                | 85,962   |
|      Other  current assets                                                                                           |                       | 12,287   |                | 10,782   |
|                 Total current assets                                    |                       | 303,719  |                | 325,355  |
| Property,  plant and equipment, at cost                                                                                                  |                       | 247,505  |                | 242,903  |
|      Less  accumulated depreciation                                                                                       |                       | (26,328)      |                | (20,844)      |
|                 Net property, plant and equipment             |                       | 221,177  |                | 222,059  |
| Goodwill                                                                                                                                      |                       | 78,858   |                | 78,858   |
| Other  intangible assets, net of accumulated amortization                                                                                |                       |               |                |               |
|      of  $2,125 and $1,722 in 2005 and 2004, respectively                                                            |                       | 29,636   |                | 30,039   |
| Other  assets                                                                                                                                 |                       | 7,453    |                | 7,446    |
|                 Total assets                                       | $                     | 640,843  |                | 663,757  |
| **Liabilities and Capital Shares and  Equities**                                                                                              | ** **            | ** **    | ** **     | ** **    |
| Current  liabilities:                                                                                                                    |                       |               |                |               |
|      Current  installments of long-term debt                                                                              | $                     | 11,226   |                | 10,483   |
|      Cattle  purchases payable                                                                                       |                       | 52,909   |                | 37,586   |
|      Accounts  payable                                                                                                    |                       | 40,040   |                | 51,438   |
|      Due  to affiliates                                                                                              |                       | 353      |                | 416      |
|      Patronage  refunds payable in cash                                                                                   |                       | 847      |                | 847      |
|      Accrued  compensation and benefits                                                                              |                       | 16,053   |                | 20,828   |
|      Accrued  insurance                                                                                                   |                       | 15,290   |                | 13,903   |
|      Other  accrued expenses and liabilities                                                                         |                       | 11,595   |                | 7,690    |
|      Distributions  payable                                                                                               |                       | 412      |                | 2,296    |
|                 Total current liabilities                          |                       | 148,725  |                | 145,487  |
| Long-term  liabilities:                                                                                                                       |                       |               |                |               |
|      Long-term  debt, excluding current maturities                                                                   |                       | 313,076  |                | 331,812  |
|      Interest  rate exchange agreement                                                                                    |                       | 27       |                | 105      |
|      Other  liabilities                                                                                              |                       | 4,934    |                | 5,237    |
|                 Total long-term liabilities                             |                       | 318,037  |                | 337,154  |
|                 Total liabilities                             |                       | 466,762  |                | 482,641  |
| Minority interest in National Beef  Packing Company and Kansas    City Steak, LLC                                                             |                       | 60,334   |                | 63,108   |
| Capital  shares and equities:                                                                                                            |                       |               |                |               |
|      Members'  capital, 691,845 class A units and 691,845 class B units                                                   |                       |               |                |               |
|           authorized,  issued and outstanding                                                    |                       | 62,966   |                | -        |
|      Common  stock, $0.01 par value; authorized 5,000,000 shares,                                                         |                       |               |                |               |
|           691,845  shares issued and outstanding                                       |                       | -        |                | 7        |
|      Cooperative  members' contributed capital                                                                            |                       | -        |                | 39,531   |
|      Nondelivery  fee                                                                                                |                       | -        |                | 1,330    |
|      Patronage  notices                                                                                                   |                       | 50,752   |                | -        |
|      Patronage  refunds for reinvestment                                                                             |                       | -        |                | 50,752   |
|      Unallocated  equity                                                                                                  |                       | -        |                | 26,375   |
|      Accumulated  other comprehensive income                                                                              |                       | 29       |                | 13       |
|                 Total capital shares and equities                       |                       | 113,747  |                | 118,008  |
|                 Total liabilities and capital shares and equities  | $                     | 640,843  |                | 663,757  |
|                                                                                                                                               |                       |               |                |               |
| See  accompanying notes to consolidated financial statements.                                                                                 |                       |               |                |               |

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| **U.S.****PREMIUM BEEF, LLC AND SUBSIDIARIES**                |
|---------------------------------------------------------------|
| **Consolidated Statements of  Operations**                    |
| (in thousands, except per unit  data)                         |
|                                                               |  |  |  |  |  |  |  |  |
|                                                               |  |  |  |  |  |  |  |  |
|                                                               |  |  | ** ** | ** ** | **13 weeks ended** | ** ** | **13 weeks ended** |
|                                                               |  |  | ** ** | ** ** | **November 27, 2004** | ** ** | **November 29, 2003** |
|                                                               |  |  | ** ** | ** ** | **(unaudited)** | ** ** | **(unaudited)** |
|                                                               |  |  |  |  |  |  |  |  |
| Net sales                                                     |  |  |  $ | 1,050,720  |  | 1,058,306  |
|                                                               |  |  |  |  |  |  |  |  |
| Costs and  expenses:                                          |  |  |  |  |  |  |
|                                                               | Cost of  sales |  |  |  | 1,034,189  |  | 1,018,869  |
|                                                               | Selling,  general and administrative expenses |  | 8,992  |  | 7,854  |
|                                                               | Depreciation  and amortization |  | 6,038  |  | 6,669  |
|                                                               |  |  |  |  |  |  |  |  |
|                                                               |  | Total  costs and expenses |  | 1,049,219  |  | 1,033,392  |
|                                                               |  |  |  |  |  |  |  |  |
|                                                               |  |  | Operating  income |  | 1,501  |  | 24,914  |
|                                                               |  |  |  |  |  |  |  |  |
| Other  income (expense):                                      |  |  |  |  |  |
|                                                               | Interest  income |  |  | 145  |  | 178  |
|                                                               | Interest  expense |  |  | (6,854) |  | (6,428) |
|                                                               | Minority  owner's interest in net loss (income) |  |  |  |  |
|                                                               |  | of  National Beef Packing Co., LLC |  | 2,382  |  | (8,620) |
|                                                               | Minority  owners' interest in net income |  |  |  |  |
|                                                               |  | of Kansas City Steak, LLC |  | (54) |  | (8) |
|                                                               | Equity in  loss of aLF Ventures, LLC |  | (122) |  | (311) |
|                                                               | Interest  rate exchange agreement |  | 78  |  | 351  |
|                                                               | Other, net |  |  | 480  |  | 362  |
|                                                               |  |  |  |  |  |  |  |  |
|                                                               |  |  | (Loss)  income before taxes |  | (2,444) |  | 10,438  |
|                                                               |  |  |  |  |  |  |  |  |
| Income tax  expense                                           |  |  | (538) |  | (831) |
|                                                               |  |  |  |  |  |  |  |  |
|                                                               |  |  | Net (loss)  income |  $ | (2,982) |  | 9,607  |
|                                                               |  |  |  |  |  |  |  |  |
| Loss per  unit                                                |  |  |  |  |  |  |  |
|                                                               | Basic |  |  |  |  $ | (4.31) |  | -  |
|                                                               | Diluted |  |  |  |  $ | (4.31) |  | -  |
|                                                               |  |  |  |  |  |  |  |  |
| Outstanding  weighted-average units                           |  |  |  |  |
|                                                               | Basic |  |  |  |  | 691,845  |  | -  |
|                                                               | Diluted |  |  |  |  | 691,845  |  | -  |
|                                                               |  |  |  |  |  |  |  |  |
| Pro forma amounts assuming the conversion                     |  |  |  |
| to an LLC is applied  retroactively:                          |  |  |  |  |  |
|                                                               |  |  |  |  |  |  |  |  |
| (Loss)  earnings per unit                                     |  |  |  |  |  |
|                                                               | Basic |  |  |  |  $ | (4.31) |  | 13.89  |
|                                                               | Diluted |  |  |  |  $ | (4.31) |  | 13.64  |
|                                                               |  |  |  |  |  |  |  |  |
| Outstanding  weighted-average units                           |  |  |  |  |
|                                                               | Basic |  |  |  |  | 691,845  |  | 691,845  |
|                                                               | Diluted |  |  |  |  | 691,845  |  | 704,512  |
|                                                               |  |  |  |  |  |  |  |  |
| See  accompanying notes to consolidated financial statements. |  |  |
|                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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** **

| **U.S.****PREMIUM BEEF, LLC AND SUBSIDIARIES**                |
|---------------------------------------------------------------|
| **Consolidated Statements of Cash  Flows**                    |
| (in thousands)                                                |
|                                                               |  |  | ** ** | **13 weeks ended** | ** ** | **13 weeks ended** |
|                                                               |  |  | ** ** | ** ****November 27, 2004****** | ** ** | ** ****November 29, 2003****** |
|                                                               |  |  | ** ** | ** ** | **    (unaudited)** | ** ** | ** (unaudited)** |
| Cash flows  from operating activities:                        |  |  |  |  |
|                                                               | Net (loss)  income | $ | (2,982) |  | 9,607  |
|                                                               |  Adjustments to reconcile net (loss) income to net cash  provided       by operating activities:  |  |  |
|                                                               |  | Depreciation  and amortization |  | 6,038  |  | 6,669  |
|                                                               |  | (Gain)  loss on disposal of property, plant and equipment |  | (102) |  | 1  |
|                                                               |  | Minority  interest |  | (2,328) |  | 8,628  |
|                                                               |  | Interest  rate exchange agreement |  | (78) |  | (351) |
|                                                               |  | Changes in  assets and liabilities: |  |  |  |  |
|                                                               |  |  | Accounts  receivable |  | 15,526  |  | (6,883) |
|                                                               |  |  | Due from  affiliates |  | 1,155  |  | (416) |
|                                                               |  |  | Other  receivables |  | 1,593  |  | 322  |
|                                                               |  |  | Inventories |  | 9,603  |  | (15,498) |
|                                                               |  |  | Other  assets |  | (1,512) |  | (528) |
|                                                               |  |  | Accounts  payable |  | (9,247) |  | 3,058  |
|                                                               |  |  | Due to  affiliates |  | (63) |  | (77) |
|                                                               |  |  | Accrued  compensation and benefits |  | (4,775) |  | (11,139) |
|                                                               |  |  | Accrued  insurance |  | 1,387  |  | (2,288) |
|                                                               |  |  | Other  accrued expenses and liabilities |  | 3,602  |  | 1,584  |
|                                                               |  |  | Cattle  purchases payable |  | 22,263  |  | 10,661  |
|                                                               |  |  | Net cash provided by operating activities |  | 40,080  |  | 3,350  |
| Cash flows  from investing activities:                        |  |  |  |  |
|                                                               | Capital  expenditures, including interest capitalized |  | (5,170) |  | (6,781) |
|                                                               | Proceeds  from sale of property, plant and equipment |  | 519  |  | 239  |
|                                                               |  |  | Net cash used in investing activities |  | (4,651) |  | (6,542) |
| Cash flows  from financing activities:                        |  |  |  |  |
|                                                               | Proceeds  from membership and registration fees |  | -  |  | 6  |
|                                                               | Proceeds  from nondelivery fees |  | -  |  | 112  |
|                                                               | Net  payments under revolving credit lines and note payable |  | (17,733) |  | 16,105  |
|                                                               | Payments  of notes payable and fees |  | (260) |  | (244) |
|                                                               | Change in  overdraft balances |  | (10,420) |  | 6,292  |
|                                                               | Partnership  distributions |  | (2,296) |  | (14,629) |
|                                                               |  |  | Net cash (used in) provided by financing activities |  | (30,709) |  | 7,642  |
| Effect of  exchange rate changes on cash                      |  | 16  |  | 7  |
| Net  increase in cash                                         |  | 4,736  |  | 4,457  |
| Cash and  cash equivalents at beginning of the period         |  | 43,611  |  | 42,228  |
| Cash and  cash equivalents at end of the period               | $ | 48,347  |  | 46,685  |
| Supplemental  information:                                    |  |  |  |  |
|                                                               | Cash paid  during the period for interest | $ | 2,134  |  | 426  |
|                                                               | Cash paid  during the period for taxes, net | $ | 7  |  | 281  |
|                                                               |  |  |  |  |  |  |  |
| See  accompanying notes to consolidated financial statements. |  |  |  |  |

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** **

**U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES****NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** 

**(1)Interim Financial Statements**

**Basisof Presentation**

The accompanying unaudited Consolidated FinancialStatements have been prepared in accordance with accounting principlesgenerally accepted in the United States of America (GAAP) for interim financialinformation; therefore, they do not include all of the information andfootnotes required by GAAP for complete financial statements. In the opinion ofmanagement, all adjustments considered necessary for a fair presentation havebeen included. For further information, refer to the audited ConsolidatedFinancial Statements and Notes to Consolidated Financial Statements, which areincluded in the Company's Annual Reporton Form 10-K on file with the Securitiesand Exchange Commission (SEC) for the fiscal year ended August 28, 2004.  Theresults of operations for the interim periods presented are not necessarilyindicative of the results for a full fiscal year.  Certain prior year amounts havebeen reclassified to conform to the current year presentation.

On August 18, 2004, the shareholders of U.S. PremiumBeef, Ltd. approved the merger of the cooperative into a wholly-ownedsubsidiary, U.S. Premium Beef, Inc., a Delaware corporation. The merger was effective on August 29, 2004. The Delawarecorporation then, in a statutory conversion authorized under Delaware law,converted into a Delaware limited liability company. Under the new ownershipstructure, each share of common stock of the cooperative was converted to oneunit of Class A interest and one unit of Class B interest.  Immediatelyfollowing the conversion, there were 691,845 units of Class A interests and691,845 units of Class B interests.  For a period to be determined by theboard of directors, each Class A unit will be linked to its corresponding ClassB unit and each pair of linked units must, if transferred, be transferredtogether.  Patronage refunds for reinvestment in the cooperative werecarried over at their face amount into the LLC as patronage notices.  

*Class A Interests.*  Holders of Class A interests are entitled to a pro rata share of33% of the profits and losses; to receive distributions of the Company's netcash flow when declared by the board of directors; to participate in thedistribution of the Company's assets if it dissolves or liquidates after paymentof the Patronage Notices, and, if the holder is a member, to vote on matterssubmitted to a vote of the Company's members.  Holders of Class Ainterests are committed under Uniform Delivery and Marketing Agreements todeliver one head of cattle to the Company annually for each unit held.  

*Class B Interests.*  Holders of Class B interests are entitled to a pro rata share of67% of the profits and losses; to receive distributions of the Company's netcash flow when declared by the board of directors; to participate in thedistribution of the Company's assets if it dissolves or liquidates after thepayment of the Patronage Notices, and, if the holder is a member, to vote onmatters submitted to a vote of the Company's members.  Holders of Class Binterests have no cattle delivery commitment.

*Patronage Notices.*  Holders of patronage notices do not constitute units ormembership interests in the Company, and holders will not be unitholders ormembers of the Company by virtue of holding patronage notices. As was the casein the cooperative, patronage notices will be paid by the Company at such timeand in such amounts as may be determined by the board of directors in its soleand absolute discretion. Upon liquidation, holders of patronage notices will bepaid before holders of Class A and Class B interests.  Patronage noticescarry no other or additional rights.

NB Finance Corp., a wholly-owned finance subsidiary ofNBP, is a co-issuer on a joint and several basis with NBP of the Senior Notes,which are its senior unsecured obligations, ranking equal in right of paymentwith all of its other senior unsecured obligations.  NB Finance Corp. hasnominal assets and conducts no business or operations. There are no significantrestrictions on the ability of subsidiaries to transfer funds to USPB.

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**(2)Inventories**

Inventories at November 27, 2004and August 28, 2004 consisted of the following (in thousands):

|                                     | **November 27, 2004** | ** **   | **August 28, 2004** |
|-------------------------------------|-----------------------|--------------|---------------------|
| Dressed  and boxed beef             |  $               | 59,313  | ** **          |  $ | 67,801  |
| Beef  by-products                   | 7,489            | ** **   | 9,158          |
| Supplies                            | 9,557            | ** **   | 9,003          |
|      Total inventory |  $               | 76,359  | ** **          |  $ | 85,962  |

** **

**(3)Comprehensive (Loss) Income**

Comprehensive (loss) income, which consists of net (loss)income and foreign currency translation adjustments,was as follows for the periods indicated (in thousands):

|                                           | **13 Weeks Ended****November 27, 2004** | **13 Weeks Ended****November 29, 2003** |
|-------------------------------------------|-----------------------------------------|-----------------------------------------|
| Net  (loss) income                        |  $                                 | (2,982)                                 |  $ | 9,607  |
| Other  comprehensive income:              |                                         |                                         |
| Foreign  currency translation adjustments | 16                                 | 7                                  |
| Comprehensive  (loss) income              |  $                                 | (2,966)                                 |  $ | 9,614  |

**(4) Income Taxes**

Subchapter T of the Internal Revenue Code sets forthrules for the tax treatment of cooperatives and applies both to cooperativesexempt from tax under Section 521 of the Internal Revenue Code and to nonexemptcooperatives. Prior to August 29, 2004, the Company operated as an exempt cooperative. As anexempt cooperative, a company is not taxed on amounts of patronage and non-patronagesource income withheld from its patrons in the form of qualified per-unitretains or on amounts distributed to its patrons in the form of QualifiedWritten Notices of Allocation. Such amounts are instead taxed directly to thepatrons. If the Company was not entitled to be taxed under Subchapter T, itsincome would be taxed to the Company similar to a corporation and the patronswould be taxed when and if dividends are distributed. The characterization ofincome as patronage or non-patronage source income is subject to challenge bythe Internal Revenue Service. Non-patronage source income, which is deemed morethan incidental, is subject to tax at the entity level instead of passedthrough to the patrons in the form of a patronage distribution. Notwithstanding the acquisition of a controlling interest in NBP on August 6, 2003, managementcontinues to believe that its non-patronage source income, if any, isincidental and would vigorously defend any such challenge by the InternalRevenue Service. However, USPB has recognized tax expense in the accompanying firstquarter fiscal 2004 consolidated financial statements on a portion of itsearnings for periods after August 6, 2003 to provide for such potential recharacterization ofincome from patronage source to non-patronage source, which may be asserted bythe Internal Revenue Service.

Effective August 29, 2004,the Company was converted to an LLC, and under this structure, taxes are notprovided at the Company level because the results of operations are included inthe taxable income of the individual members.

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**(5) Minority Interest**

At any time after certain dates, the earliest being July31, 2008, the latest being July 31, 2011, certain members of management of NBP and/orNBPCo Holdings have the right to request that NBP repurchase their interests,the value of which is to be determined by a mutually agreed appraisal process.If NBP is unable to elect the repurchase within a specified time, therequesting member(s) have the right to cause a sale process to commence. NBPaccounts for changes in the redemption value of these interests by accretingthe change over the period from the date of issuance to the earliest redemptiondate of the respective interests. At November 27, 2004,the minority interest in National Beef, included in the minority interest inthe accompanying Condensed Consolidated Balance Sheet, was revalued by anindependent appraisal process, and the value was determined to be $59.1million. Accordingly, the carrying value of the minority interest has beenreduced by accretion of approximately $0.03 million during the thirteen weeksended November 27, 2004, resulting in the $59.6 million carrying value at November 27, 2004. 

** (6)Contingencies**

On July 1, 2002, alawsuit was filed against Farmland National Beef Packing Company, L.P. (FNB or thepredecessor to NBP), ConAgra Beef Company, Tyson Foods, Inc. and ExcelCorporation in the United States District Court for the District of SouthDakota seeking certification of a class of all persons who sold cattle to thedefendants for cash, or on a basis affected by the cash price for cattle,during the period from April 2, 2001 through May 11, 2001 and for some periodup to two weeks thereafter. The case was filed by three named plaintiffs onbehalf of a putative nationwide class that plaintiffs estimate is comprised ofhundreds or thousands of members. The complaint alleges that the defendants, inviolation of the Packers and Stockyards Act of 1921, knowingly used, withoutcorrection or disclosure, incorrect and misleading boxed beef price informationgenerated by the USDA to purchase cattle offered for sale by the plaintiffs ata price substantially lower than was justified by the actual and correct priceof boxed beef during this period. Plaintiffs also seek recovery against alldefendants under a theory of unjust enrichment.  The plaintiffs seek damages inexcess of $50.0 million from all defendants as a group on behalf of the class. FNB answered the complaint and joined with the three other defendants in movingto dismiss this action. An amended complaint was filed and FNB joined in theother defendants' motion to dismiss. The joint motion to dismiss was denied,and the judge ruled that the plaintiffs adequately alleged a violation of thePackers and Stockyards Act of 1921. The case was certified as a class-actionmatter in June of 2004.  Accordingly, the lawsuit will proceed to trial.Management believes that FNB acted properly and lawfully in dealings withcattle producers. Management is currently unable to evaluate the outcome ofthis matter or to estimate the amount of potential loss, if any. In accordancewith SFAS No. 5, Accounting for Contingencies, NBP has not established a lossaccrual associated with this claim. 

The Company is also a party to a number of otherlawsuits and claims arising out of the operation of our business. Managementbelieves the ultimate resolution of such matters should not have a materialadverse effect on our financial condition, results of operations or liquidity. 

**(7) ****United States****BSE Outbreak**

On December 23, 2003, it was announced by the UnitedStates Department of Agriculture (USDA) that a single Holstein dairycow was discovered in the state of Washington to have tested positive for bovine spongiformencephalopathy (BSE).  The origin of the animal was subsequently traced to afarm in Canada.  Shortly after the announcement, several countriesrepresenting a substantial share of NBP's export business closed their bordersto the importation of edible beef products from the United States. Responding to the loss of export markets, live cattle prices in the United Statesdeclined by approximately 18% within 3 days.  In fiscal 2004, NBP's totalexport sales were approximately 10% of total net sales.

----

During the second quarter of fiscal 2004, NBP recordedcharges to earnings totaling approximately $18.8 million due to the marketimpacts of the closure of international borders as a result of the BSEdiscovery in late December.  These charges, recorded in sales and cost of salesin the Company's second quarter of fiscal 2004 Consolidated Statement ofOperations, reflect:  (1) volatility in the U.S. markets for finished goods andlive cattle, with an impact noted in immediate margin erosion resulting from arapid fall in cutout or sales values; (2)  some product already destined forforeign markets re-routed for resale in the U.S., generally at prices lowerthan their original export value; and (3) lower value for certain inventoryitems which had been in the production pipeline and had not yet left the U.S.as they had no comparable domestic market.  Certain by-products have beenclassified as Specified Risk Materials (SRMs), and have been banned from use infeedstocks and the human food chain. Some of these products previously enjoyeda market in foreign countries.  The impacts of BSE were positively offset, inpart, by strong domestic demand for beef products.  

In addition, the USDA and the Food Safety InspectionService (FSIS) published new regulations in response to the discovery of BSE inthe state of Washington.  These new regulations, among other things, governthe removal of SRMs during slaughter, cover the ban on the slaughtering ofnon-ambulatory animals for human food use, set forth the prohibition on theproduction of mechanically separated meat and ban certain techniques used inthe slaughter process.  The USDA also issued a notice announcing that FSISinspectors will not mark ambulatory cattle that have been targeted for BSEsurveillance testing as "inspected and passed" until negative test results areobtained.  The Company does not anticipate that these new regulations,individually or in the aggregate, will have a material adverse effect on itsbusiness.

While exports of some beef products have commencedonce again to Mexico, NBP cannot anticipate the duration of othercontinuing beef import bans or whether additional countries may impose similarrestrictions.  Thus far, the effect of resumed export of beef products to Mexico hasbeen marginal on the United States beef packing industry.  Fed cattle slaughter levelsin the United States for FYE 2004 fell approximately 8.9% below year-agolevels, reflecting constrained cattle supplies and reduced demand for exportproducts.

The closure of U.S. borders to the importation ofCanadian feeder and fattened (ready for slaughter) animals which occurred inMay 2003 following the discovery of BSE in Alberta that same month tightenedthe U.S. cattle supply; and, although the U.S. border opened to Canadianproduced boxed beef in September 2003, the entire U.S. beef packing industrycontinued at a price disadvantage while the ban on importation of Canadianlivestock was maintained.   This continued closure of the U.S. border toCanadian livestock has resulted in higher overall feeder and fed cattle pricesin the U.S., negatively impacting raw material prices and increased imports ofboxed beef, negatively affecting boxed beef prices.

The USDA has published a proposed rule revisingits policy to keep the U.S. border closed to live animals for processing in the U.S.  Thecomment period for this proposed rule closed on April 7, 2004 and publication ofa final rule was anticipated within a reasonable time following closure of thecomment period.  In the interim, Ranchers Cattlemen Action Legal Fund UnitedStockgrowers of America (R-CALF, a northern states cattle producer's organization)was successful in obtaining an injunction against the USDA allowing importationof certain beef products produced in Canada pursuant to this rule, because theUSDA did not follow the "Administrative Procedures Act" prior to issuing itsorder allowing such action.  

On December 29, 2004, the USDA announced it hadestablished conditions under which it will allow imports of live cattle under30 months of age and certain other commodities from regions with effectivebovine spongiform encephalopathy (BSE) prevention and detection measures. Prior to being able to import to the U.S., each country must undergo a thorough risk assessmentto be recognized as a "minimal-risk region."  Canada will be the first countryrecognized as a minimal-risk region and, as such, will be eligible to export tothe U.S. live cattle under 30 months of age (subject to certain restrictions),as well as certain other animals and products.  The final rule was published in the January 4, 2005 *Federal Register* and willbe effective March 7, 2005 unless delayed by litigation, legislation or otherreasons.  The USDA estimates that up to two million live cattle under 30 monthsof age could be exported to the U.S. from Canada in the first twelve months after the rule takeseffect.

----

On January 2, 2005, the Canadian Food InspectionAgency confirmed that an older dairy cow from Alberta has tested positive forBSE.  The infected animal was born in 1996, prior to the introduction of the1997 feed ban.  As stated in the USDA press release of December 30, 2004,the U.S. would not alter the implementation of its rule to resume trade with Canada,although NBP can provide no assurance regarding this statement.  On January 3,2005, the USDA issued a statement expressing confidence in the animal andpublic health measures that Canada has in place, noting that the riskassessment, conducted by the USDA as part of the rulemaking process todetermine Canada's status as a minimal-risk region, included theconsideration of the possibility that Canada could experience additional cases of BSE.

A United States/Japanese Commission was formed to lookat the optimal "science based" approach to resolving the issues between the U.S. and Japan.  Thecommission held its last meeting in July 2004.  Following this meeting, traderepresentatives from the United States and Japan continued their discussions on reopening of theJapanese market to imported beef products from the United States. 

On October 23, 2004, the USDA announced that Japan and the U.S. hadreached an agreement on opening the border for export to Japan.  Overthe coming months, many details will have to be worked out by bothgovernments.  Part of the agreement involves the tracking of animals of knownage from the ranch so that only meat from animals less than 21 months of agecan be shipped to Japan.  It may require considerable effort and resourcesfor NBP to develop and implement such a system over the coming months.  It isexpected that the markets will begin to open for some products mid-year in calendar2005, although no assurance can be given that this will occur.  

Announcements of inconclusive, preliminary test resultsfor BSE can be expected from time to time as a result of the sensitivity of thenew screening regime.  The impact on the market created by such uncertainty isnot possible to predict.

The Company cannot presently assess the full economicimpact of the consequences of BSE on the U.S. beef packing industry or on its operations.  TheCompany's revenues and net income may be materially adversely affected in theevent existing import restrictions continue indefinitely, additional countriesannounce similar restrictions, additional regulatory restrictions are put intoeffect or domestic consumer demand for beef declines substantially. 

**(8) Bank Covenant Compliance**

Effective November 19, 2004,NPB's amended credit facility was further amended to reflect changes infinancial covenants.  The amended credit facility, as amended, contained thefollowing financial covenants, as of November 27, 2004:

•        Maximum funded debt to fourquarter rolling EBITDA (as defined in the credit agreement) ratio of                        7.25x;           •        Maximum senior secured funded debtto four quarter rolling EBITDA ratio of 4.50x;           •        Minimum four quarter rollingEBITDA of $50 million;           •        Minimum working capital of $92.25million;           •        Maximum annual capitalexpenditures of $30 million.

As defined in NBP's amended credit facility, EBITDAcontains specified adjustments.  On November 27, 2004,NBP was in compliance with all financial covenant ratios.

----

Effective December 30, 2004,NBP amended and restated its existing senior credit facility with a consortiumof banks.  The facility now consists of a $120.0 million term loan that maturesin December 2014 and a $140.0 million revolving line of credit loan thatmatures in December 2009 that is subject to certain borrowing base limitations. The amendment and restatement is within the scope of the Emerging Issues TaskForce (EITF) 96-19, *Debtor's Accounting for a Modification or Exchange ofDebt Instruments* as well as EITF 98-14,*Debtor's Accounting for Changesin Line-of-Credit or Revolving-Debt Arrangements*.  In accordance with thatguidance, a portion of the unamortized loan costs of approximately $2.5 millionfrom the previous credit facility as well as additional finance and legalcharges associated with the new amended and restated credit facility ofapproximately $0.6 million will be written off during the Company's secondquarter of fiscal year 2005.  At the closing of the transaction, NBP borrowed$120.0 million under the term loan and $4.6 million under the revolving loanwith an additional $43.0 million of the revolving loan used in the form ofletters of credit.

The borrowings under the revolving loan are available forNBP's working capital requirements, capital expenditures and other generalcorporate purposes.  The amended and restated credit facility is secured by afirst priority lien on substantially all of NBP's assets.  The principal amountoutstanding under the term loan is due and payable in equal quarterlyinstallments of $6.0 million on the last business day of each March, June,September and December commencing on March 31, 2010 and ending on December 29, 2014. Prepayment is allowed at any time.  

NBP's amended and restated credit facility containscovenants that limit its ability to incur additional indebtedness, sell ordispose of assets, pay certain dividends and prepay or amend certainindebtedness among other matters.  The amended and restated credit facilityalso contains a provision for a conversion to more favorable interest rate andmore restrictive financial covenants on the earlier of (a) June 1, 2006 or(b) the election of NBP (the Conversion Date).  Currently the interestrate for the term loan is either the greater of (a) the Base Rate (as definedin the credit agreement) plus 75 basis points or (b) LIBOR plus 275 basispoints.  Currently the interest rate for the revolving loan is either thegreater of (a) the Base Rate plus 50 basis points or (b) LIBOR plus 250 basispoints.  After the Conversion Date, the interest rate for theterm loan and revolving loan is determined by reference to a matrix of ratesthat are keyedto NBP's funded debt to EBITDA ratio.

The amended and restated credit facility imposescertain financial covenants.  From December 30, 2004 until the Conversion Date,NBP is required to  (i) have as of the end of each fiscal quarter aminimum four-quarter rolling EBITDA of $50.0 million and (ii) maintain atall times a minimum Borrowing Base Availability (as defined in the credit agreement)of at least $25.0 million.  After the Conversion Date, NBP is required to maintainat all times a specified maximum funded debt to EBITDA ratio, a maximum senior securedfunded debt to EBITDA ratio, a minimum four-quarter rolling EBITDA and aminimum four-quarter rolling debt service coverage ratio. In addition, NBP'sannual net capital expenditures are limited to amounts ranging from $32 millionin fiscal 2005 to $40 million in fiscal 2008 and fiscals years thereafter.

----

**(9) Subsequent Events**

*IndustrialRevenue Bonds*

In conjunction with the amendment and restatement ofNBP's credit facility, effective December 30, 2004, NBPentered into a transaction with the City of Dodge City, Kansas, in order toprovide NBP property tax savings.  Under the transaction, the City purchasedNBP's Dodge City facility (the facility) by issuing $102.3 million inbonds due in December 2014, and leased the facility to NBP for an identicalterm under a capital lease.  The City's bonds were purchased by NBP usingproceeds of its term loan under the amended and restated credit facility.  Becausethe City has assigned the lease to the bond trustee for the benefit of NBP asthe sole bondholder, NBP, in effect, controls enforcement of the lease againstitself.  As a result of the capital lease treatment, the facility will remain acomponent of property, plant and equipment in NBP's consolidated balancesheet.  As a result of the legal right of offset, the capital lease obligationand the corresponding bond investments will be eliminated in consolidation. The transaction provides NBP with property tax exemptions for the leasedfacility, which, after netting payments to the City and local school districtunder payments in lieu of tax agreements, results in an annual savings ofapproximately 25% in property taxes.  The facility remains subject to a priormortgage and security interest in favor of the lenders under the senior creditfacility.  Additional revenue bonds may be issued to cover the costs of certainimprovements to this facility.  The total amount of revenue bonds authorized forissuance is $120.0 million.

*Utilities Commitment*

Effective December 30, 2004, NBP finalized anagreement with the City of Dodge City, Kansas, whereby in consideration ofcertain improvements made to the City water and wastewater systems, NBP hascommitted to make a series of service charge payments totaling $19.3 millionover a 20 year period.  Payments under the commitment will be $0.8 million infiscal year 2005, $1.2 million in fiscal year 2006, $1.4 million in fiscal year2007, $1.4 million in fiscal year 2008, $1.4 million in fiscal year 2009 with thebalance of $13.1 million to be paid in subsequent years.   

** (10) Earnings (Loss) Per Unit**

Prior to the conversion from a cooperative to an LLC,per share data had been omitted because, under the cooperative structure,earnings of the Company were distributed as patronage dividends to members andassociate members, those who lease delivery rights from shareholders, based onthe level of business conducted with the Company as opposed to a commonshareholder's proportionate share of underlying equity in the Company.  Underthe LLC structure, earnings of the Company will be distributed to unitholdersbased on their proportionate share of underlying equity, and, as a result,earnings per unit has been presented in the accompanying Consolidated Statementof Operations, along with the pro forma amounts for the prior year firstquarter assuming the conversion to an LLC was retroactively applied.

----

Basic earnings per unit (EPU) excludes dilution and iscomputed by dividing income available to unitholders by the weighted-averagenumber of units outstanding for the period.  Diluted EPU reflects the potentialdilution that could occur if unit options were exercised or converted intounits.   Options to purchase 20,000 units for $55 were issued and outstandingfor both periods.  Options were excluded from the 2005 diluted earnings perunit calculations as the effect of their inclusion would have beenanti-dilutive on the loss per unit calculation.

| (In thousands except per  unit data)                                              | November 27, 2004           |
|-----------------------------------------------------------------------------------|-----------------------------|
|                                                                                   | (Loss) Earnings             |  | Units |  | Per-Unit |
|                                                                                   | (Numerator)                 |  | (Denominator) |  | Amount |
|                                                                                   |                             |  |  |  |  |  |  |
| Basic loss per unit                                                               |                             |  |  |  |  |  |  |
| Income available to  unitholders                                                  | $                           | (2,982) |  | 691,845  |  | $ | (4.31) |
| Effect of dilutive  securities - unit       options |                             |  |  | -  |  |  |  |
| Diluted loss per unit                                                             |                             |  |  |  |  |  |  |
| Income available to  unitholders                                                  |                             |  |  |  |  |  |  |
|    including assumed  conversion                                        | $                           | (2,982) |  | 691,845  |  | $ | (4.31) |
|                                                                                   |                             |  |  |  |  |  |  |
|                                                                                   | Pro Forma November 29, 2003 |
|                                                                                   | Earnings                    |  | Units |  |  | Per-Unit |
|                                                                                   | (Numerator)                 |  | (Denominator) |  |  | Amount |
|                                                                                   |                             |  |  |  |  |  |  |
| Basic earnings per unit                                                           |                             |  |  |  |  |  |  |
| Income available to  unitholders                                                  | $                           | 9,607  |  | 691,845  |  | $ | 13.89  |
| Effect of dilutive  securities - unit       options |                             |  |  | 12,667  |  |  |  |
| Diluted earnings per  unit                                                        |                             |  |  |  |  |  |  |
| Income available to  unitholders                                                  |                             |  |  |  |  |  |  |
|    including assumed  conversion                                        | $                           | 9,607  |  | 704,512  |  | $ | 13.64  |
|                                                                                   |                             |  |  |  |  |  |  |

<back to Table of Contents>
**Item 2.  Management'sDiscussion and Analysis of Financial Condition and Results of Operations.    **

**DisclosureRegarding Forward-Looking Statements**

This report contains"forward-looking statements," which are subject to a number of risks anduncertainties, many of which are beyond our control. Forward-looking statementsare typically identified by the words "believe," "expect," "anticipate,""intend," "estimate" and similar expressions. Actual results could differmaterially from those contemplated by these forward-looking statements as aresult of many factors, including economic conditions generally and in ourprincipal markets, the availability and prices of live cattle and commodities,food safety, livestock disease, competitive practices and consolidation in thecattle production and processing industries, actions of domestic or foreign governments,hedging risk, changes in interest rates and foreign currency exchange rates,consumer demand and preferences, the cost of compliance with environmental andhealth laws, loss of key customers, loss of key employees, labor relations andconsolidation among our customers. In light of these risks and uncertainties,there can be no assurance that the results and events contemplated by theforward-looking information contained in this report will in fact transpire.Readers are cautioned not to place undue reliance on these forward-lookingstatements. We do not undertake any obligation to update or revise anyforward-looking statements. All subsequent written or oral forward-lookingstatements attributable to us or persons acting on our behalf are expresslyqualified in their entirety by these factors.  Please review the "Risk Factors"in "Item 1. Business" of USPB's Annual Report on Form 10-K filed with theSecurities and Exchange Commission on November 26, 2004 for other importantfactors that could cause actual results to differ materially from those in anysuch forward-looking statements, and which should be read in conjunction withthis report.

**IndustryOutlook**

The USDAhas established conditions which allow the Canadian border to become eligiblefor re-opening in early March 2005 for importation of live cattle under 30months of age, subject to certain restrictions.  Also, while there is aframework of an agreement for the resumption of trade with Japan, itappears trade will not resume for several months.  Currently live weightsof cattle being slaughtered are considerably higher than last year, implyingsupplies of cattle in the near term will be larger; however, untilinternational market access is restored and live cattle are permitted from Canada, marginswill be negatively impacted.  

**RecentDevelopments**

Effective December 30, 2004,our amended credit facility was further amended and restated to reflect changesin loan amounts, interest rates and financial covenants.  In conjunction withthe amendment and restatement of NBP's credit facility, the City of Dodge City,Kansas issued $102.3 million of industrial revenue bonds that effectivelyresults in annual savings of approximately 25% inproperty taxes.  These transactions are more fully described in "Liquidity andCapital Resources" below.

On December 23, 2003, it was announced by the UnitedStates Department of Agriculture (USDA) that a single Holstein dairycow was discovered in the state of Washington to have tested positive for bovine spongiformencephalopathy (BSE).  The origin of the animal was subsequently traced to afarm in Canada.  Shortly after the announcement, several countriesrepresenting a substantial share of NBP's export business closed their bordersto the importation of edible beef products from the United States. Responding to the loss of export markets, live cattle prices in the United Statesdeclined by approximately 18% within 3 days.  In FYE 2003, NBP's total exportsales were approximately 17% of total sales, including sales of non-food beefproducts such as hides.  In FYE 2004, NBP's total export sales wereapproximately 10% of total net sales.

During the second quarter of FYE 2004, NBP recordedcharges to earnings totaling approximately $18.8 million due to the marketimpacts of the closure of international borders as a result of the BSEdiscovery in late December.  These charges, recorded in sales and cost of salesin our second quarter of fiscal 2004 Consolidated Statement of Operations,reflect:  (1) volatility in the U.S. markets for finished goods and livecattle, with an impact noted in immediate margin erosion resulting from a rapidfall in cutout or sales values; (2)  some product already destined for foreignmarkets re-routed for resale in the U.S., generally at prices lower than theiroriginal export value; and (3) lower value for certain inventory items whichhad been in the production pipeline and had not yet left the U.S. as they hadno comparable domestic market.  Certain by-products have been classified asSpecified Risk Materials (SRMs), and have been banned from use in feedstocksand the human food chain. Some of these products previously enjoyed a market inforeign countries.  The impacts of BSE were positively offset, in part, bystrong domestic demand for beef products.  

                Inaddition, the USDA and the Food Safety Inspection Service (FSIS) published newregulations in response to the discovery of BSE in the state of Washington. These new regulations, among other things, govern the removal of SRMs duringslaughter, cover the ban on the slaughtering of non-ambulatory animals forhuman food use, set forth the prohibition on the production of mechanicallyseparated meat and ban certain techniques used in the slaughter process.  TheUSDA also issued a notice announcing that FSIS inspectors will not markambulatory cattle that have been targeted for BSE surveillance testing as"inspected and passed" until negative test results are obtained.  We do notanticipate that these new regulations, individually or in the aggregate, willhave a material adverse effect on our business.

While exports of some beef products have commencedonce again to Mexico, we cannot anticipate the duration of othercontinuing beef import bans or whether additional countries may impose similarrestrictions.  Thus far, the effect of resumed export of beef products to Mexico hasbeen marginal on the United States beef industry.  Fed cattle slaughter levels in the United Statesfor FYE 2004 fell approximately 8.9% below year-ago levels, reflectingconstrained cattle supplies and reduced demand for export products.

The closure of U.S. borders to the importation ofCanadian feeder and fattened (ready for slaughter) animals which occurred inMay 2003 following the discovery of BSE in Alberta that same month tightenedthe U.S. cattle supply; and, although the U.S. border opened to Canadianproduced boxed beef in September 2003, the entire U.S. beef packing industrycontinued at a price disadvantage while the ban on importation of Canadian livestockwas maintained.   This continued closure of the U.S. border to Canadianlivestock has resulted in higher overall feeder and fed cattle prices in the U.S.,negatively impacting raw material prices and increased imports of boxed beef,negatively affecting boxed beef prices.

The USDA has published a proposed rule revisingits policy to keep the U.S. border closed to live animals for processing in the U.S.  Thecomment period for this proposed rule closed on April 7, 2004 and publication ofa final rule was anticipated within a reasonable time following closure of thecomment period.  In the interim, Ranchers Cattlemen Action Legal Fund UnitedStockgrowers of America (R-CALF -  a northern states cattle producer'sorganization) was successful in obtaining an injunction against the USDAallowing importation of certain beef products produced in Canada pursuant tothis rule, because the USDA did not follow the "Administrative Procedures Act"prior to issuing its order allowing such action.  

On December 29, 2004, the USDA announced it hadestablished conditions under which it will allow imports of live cattle under30 months of age and certain other commodities from regions with effectivebovine spongiform encephalopathy (BSE) prevention and detection measures. Prior to being able to import to the U.S. each country must undergo a thorough risk assessmentto be recognized as a "minimal-risk region."  Canada will be the first countryrecognized as a minimal-risk region and, as such, will be eligible to export tothe U.S. live cattle under 30 months of age (subject to certain restrictions),as well as certain other animals and products.  The final rule was published in the January 4, 2005 *Federal Register* and willbe effective March 7, 2005 unless delayed by litigation, legislation or otherreasons.  The USDA estimates that up to two million live cattle under 30 monthsof age could be exported to the U.S. from Canada in the first twelve months after the rule takeseffect.

On January 2, 2005, the Canadian Food InspectionAgency confirmed that an older dairy cow from Alberta has tested positive forBSE.  The infected animal was born in 1996, prior to the introduction of the1997 feed ban.  As stated in the USDA press release of December 30, 2004,the U.S. would not alter the implementation of its rule to resume trade with Canada,although NBP can provide no assurance regarding this statement.  On January 3,2005, the USDA issued a statement expressing confidence in the animal andpublic health measures that Canada has in place, noting that the riskassessment, conducted by the USDA as part of the rulemaking process todetermine Canada's status as a minimal-risk region, included theconsideration of the possibility that Canada could experience additional cases of BSE.

A United States/Japanese Commission was formed to lookat the optimal "science based" approach to resolving the issues between the U.S. and Japan.  Thecommission held its last meeting in July 2004.  Following this meeting, traderepresentatives from the United States and Japan continued their discussions on reopening of theJapanese market to imported beef products from the United States. 

On October 23, 2004, the USDA announced that Japan and the U.S. hadreached an agreement on opening the border for export to Japan.  Overthe coming months, many details will have to be worked out by bothgovernments.  Part of the agreement involves the tracking of animals of knownage from the ranch so that only meat from animals less than 21 months of agecan be shipped to Japan.  It may require considerable effort and resourcesfor NBP to develop and implement such a system over the coming months.  It isexpected that the markets will begin to open for some products mid-year incalendar 2005, although no assurance can be given that this will occur.  

Announcements of inconclusive, preliminary test resultsfor BSE can be expected from time to time as a result of the sensitivity of thenew screening regime.  The impact on the market created by such uncertainty is notpossible to predict. 

We cannot presently assess the full economic impact ofthe consequences of BSE on the U.S. beef packing industry or on our operations.  Ourrevenues and net income may be materially adversely affected in the eventexisting import restrictions continue indefinitely, additional countriesannounce similar restrictions, additional regulatory restrictions are put intoeffect or domestic consumer demand for beef declines substantially.

**Resultsof Operations**

***Thirteen weeks ended******November 27, 2004******compared to thirteen weeks ended******November 29, 2003*********

*General.* Net loss for the thirteen weeks ended November 27, 2004was $3.0 million compared to net income of $9.6 million for the thirteen weeksended November 29, 2003, a decrease of $12.6 million.  Sales were lower inthe thirteen weeks ended November 27, 2004 than those of the prior year periodprimarily due to a decrease in boxed beef and beef product prices ofapproximately 8.1%, offset in part by an increase in the number of cattle processed. The loss of key export markets due to BSE continued to pressure beef margins.

Total costs and expenses as a percent of sales were 99.9%for the thirteen weeks ended November 27, 2004 compared to 97.6% for the thirteenweeks ended November 29, 2003.  Costs were higher due to a 5.9% increase in thenumber of cattle NBP processed from 2004, offset in part by lower live cattleprices.  Operating income decreased $23.4 million due to lower boxed beef andbeef product prices and to a continuing unfavorable pricing environment forproducts traditionally marketed outside the U.S. 

*Net Sales*. Net sales were $1,050.7 million for the thirteen weeks ended November 27, 2004compared to $1,058.3 million for the thirteen weeks ended November 29, 2003, adecrease of $7.6 million or 0.7%.  The decrease resulted primarily from adecrease in boxed beef and beef product prices of approximately 8.1%, mostlyoffset by a 5.9% increase in the number of cattle NBP processed in 2005.  Boxedbeef and beef product prices continued to be pressured by the loss of keyexport markets closed to U.S. beef products due to BSE.

                *Costof Sales*.  Cost of sales was $1,034.2 million for the thirteen weeks ended November 27, 2004compared to $1,018.9 million for the thirteen weeks ended November 29, 2003, anincrease of $15.3 million or 1.5%.  The increase resulted primarily from anincrease in the number of cattle NBP processed from 2004 of 5.9%, offset bylower live cattle prices.

                *Selling,General and Administrative Expenses*.  Selling, general and administrativeexpenses were $9.0 million for the thirteen weeks ended November 27, 2004compared to $7.9 million for the thirteen weeks ended November 29, 2003, anincrease of $1.1 million or 13.9%.  The current year reflects expenses for  statefranchise taxes of approximately $0.3 million due to the restructuring of NPBas a limited liability company, and an increase in payroll and related expensesand professional services of $0.7 million.

                *Depreciationand Amortization Expense*.  Depreciation and amortization expenses were $6.0million for the thirteen weeks ended November 27, 2004compared to $6.7 million for the thirteen weeks ended November 29, 2003, adecrease of $0.7 million or 10.4%.  The decrease is attributable to revisedestimates that had been previously utilized in the calculations fordepreciation expense in the thirteen weeks ended November 29, 2003 relative toassets acquired when we acquired a controlling interest in Farmland NationalBeef Packing Company, L.P. on August 7, 2003 and formed National Beef Packing Company, LLC.

*Operating Income*.  Operating income was $1.5 million for the thirteen weeks ended November 27, 2004compared to $24.9 million for the thirteen weeks ended November 29, 2003, adecrease of $23.4 million.  The decrease resulted from the lower boxed beef andbeef product prices due in part to the loss of key export markets closed to U.S. beefproducts due to BSE.  The continued closure of the U.S. border toCanadian livestock and the corresponding reduction in the number of live cattleavailable for processing, along with the loss of key export markets, hasresulted in compressed margins in the U.S. beef packing industry.  Operating income, as apercentage of net sales, was 0.1% for the thirteen weeks ended November 27, 2004 and2.4% for the thirteen weeks ended November 29, 2003.

                *InterestExpense*.  Interest expense was $6.9 million for the thirteen weeks ended November 27, 2004compared to $6.4 million for the thirteen weeks ended November 29, 2003, anincrease of $0.5 million or 7.8%.  The increase was due primarily to higherinterest rates in the thirteen weeks ended November 27, 2004as compared to the same period in fiscal 2004.

                *IncomeTax Expense*.  Income tax expense of $0.5 million for the thirteen weeksended November 27, 2004 compared to $0.8 million for the thirteen weeks endedNovember 29, 2003, a decrease of $0.3 million.  The decrease wasprimarily due to the conversion from a cooperative to an LLC offset byincreased tax expense as the result of higher  income for the period forNational Carriers, Inc. and the associated income tax expense on income fromthat entity, which is organized as a C Corporation.

**Liquidityand Capital Resources**

As of November 27, 2004, the Company had net workingcapital of $155.0 million, which included $1.3 million in partner and memberpayables, and cash and cash equivalents of $48.3 million. At August 28, 2004, wehad net working capital of $179.9 million, which included $3.1 million in partnerand member payables, and cash and cash equivalents of $43.6 million. Ourprimary source of liquidity is cash flows from operations and availableborrowings under our amended credit facility.

As of November 27, 2004, the Company had $324.3 millionof long-term debt, of which $11.2 million was classified as a currentliability. As of November 27, 2004, there were outstanding borrowings of $24.4 million,outstanding letters of credit of $43.0 million and available borrowings of $57.8million under NBP's $140.0 million amended credit facility. Cash flow fromoperations and borrowings under NBP's amended credit facility have funded ourworking capital requirements, capital expenditures and other general corporatepurposes. .  NBP was in compliance with all of its financial covenants underthe amended credit facility as of November 27, 2004.

In addition to outstanding borrowings under theamended credit facility, we had outstanding borrowings under industrial revenuebonds of $13.8 million, senior notes of $160.0 million, term loans of $125.7million and capital leases and other obligations of $0.4 million as of November 27, 2004.

*AmendedSenior Credit Facility*

Effective December 30, 2004,NBP amended and restated its existing senior credit facility with a consortiumof banks.  The facility now consists of a $120.0 million term loan that maturesin December 2014 and a $140.0 million revolving line of credit loan thatmatures in December 2009 that is subject to certain borrowing base limitations. The amendment and restatement is within the scope of the Emerging Issues TaskForce (EITF) 96-19, *Debtor's Accounting for a Modification or Exchange ofDebt Instruments*as well as EITF 98-14,*Debtor's Accounting for Changes inLine-of-Credit or Revolving-Debt Arrangements*.  In accordance with thatguidance, a portion of the unamortized loan costs of approximately $2.5 millionfrom the previous credit facility as well as additional finance and legalcharges associated with the new amended and restated credit facility ofapproximately $0.6 million will be written off during the Company's secondquarter of fiscal year 2005.  At the closing of the transaction, NBP borrowed$120.0 million under the term loan and $4.6 million under the revolving loanwith an additional $43.0 million of the revolving loan used in the form ofletters of credit.

The borrowings under the revolving loan are availablefor NBP's working capital requirements, capital expenditures and other generalcorporate purposes.  The amended and restated credit facility is secured by afirst priority lien on substantially all of NBP's assets.  The principal amountoutstanding under the term loan is due and payable in equal quarterlyinstallments of $6.0 million on the last business day of each March, June,September and December commencing on March 31, 2010 and ending on December 29, 2014. Prepayment is allowed at any time.  

NBP's amended and restated credit facility containscovenants that limit its ability to incur additional indebtedness, sell ordispose of assets, pay certain dividends and prepay or amend certainindebtedness among other matters.  The amended and restated credit facilityalso contains a provision for a conversion to more favorable interest rate andmore restrictive financial covenants on the earlier of (a) June 1, 2006 or(b) the election of NBP (the Conversion Date).  Currently the interestrate for the term loan is either the greater of (a) the Base Rate (as definedin the credit agreement) plus 75 basis points or (b) LIBOR plus 275 basispoints.  Currently the interest rate for the revolving loan is either thegreater of (a) the Base Rate plus 50 basis points or (b) LIBOR plus 250 basispoints.  After the Conversion Date, theinterest rate for the term loan and revolving loan is determined by referenceto a matrix of rates that are keyed to NBP's funded debt toEBITDA (as defined in the credit agreement) ratio.

The amended and restated credit facility imposescertain financial covenants.  From December 30, 2004 until the Conversion Date,NBP is required to  (i) have as of the end of each fiscal quarter aminimum four-quarter rolling EBITDA of $50.0 million and (ii) maintain atall times a minimum Borrowing Base Availability (as defined in the creditagreement) of at least $25.0 million.

 After the Conversion Date, NBP is required to maintainat all times a specified maximum funded debt to EBITDA ratio, a maximum senior securedfunded debt to EBITDA ratio, a minimum four-quarter rolling EBITDA and aminimum four-quarter rolling debt service coverage ratio. In addition, NBP'sannual net capital expenditures are limited to amounts ranging from $32 millionin fiscal 2005 to $40 million in fiscal 2008 and fiscals years thereafter.

*IndustrialRevenue Bonds*

In conjunction with the amendment and restatement ofNBP's credit facility, effective December 30, 2004, NBPentered into a transaction with the City of Dodge City, Kansas, in order toprovide NBP property tax savings.  Under the transaction, the City purchasedNBP's Dodge City facility (the facility) by issuing $102.3 million inbonds due in December 2014, and leased the facility to NBP for an identicalterm under a capital lease.  The City's bonds were purchased by NBP usingproceeds of its term loan under the amended and restated credit facility. Because the City has assigned the lease to the bond trustee for the benefit ofNBP as the sole bondholder, NBP, in effect, controls enforcement of the leaseagainst itself.  As a result of the capital lease treatment, the facility willremain a component of property, plant and equipment in NBP's consolidatedbalance sheet.  As a result of the legal right of offset, the capital leaseobligation and the corresponding bond investments will be eliminated inconsolidation.  The transaction provides NBP with property tax exemptions for theleased facility, which, after netting payments to the City and local schooldistrict under payments in lieu of tax agreements, results in an annual savingsof approximately 25% in property taxes.  The facility remains subject to aprior mortgage and security interest in favor of the lenders under the seniorcredit facility.  Additional revenue bonds may be issued to cover the costs ofcertain improvements to this facility.  The total amount of revenue bondsauthorized for issuance is $120.0 million.

Capital spending through November 27, 2004 wasapproximately $5.2 million.  NBP expects to spend approximately $30 million intotal on capital expenditures during fiscal year 2005, primarily for plantexpansion, renewals and improvements.  

We believe that available borrowings under the NBPamended and restated credit facility and cash provided by operating activitieswill be sufficient to support working capital, capital expenditures and debtservice requirements for the foreseeable future. Our ability to generatesufficient cash, however, is subject to certain general economic, financial,industry, legislative, regulatory and other factors beyond our control.

*OperatingActivities*

Net cash provided by operating activities in thethirteen weeks ended November 27, 2004 increased to $40.1 million compared to $3.4 millionin the thirteen weeks ended November 29, 2003, primarily as the result of an decreasein working capital requirements, offset by the decrease in net earnings in thecurrent year period.

*InvestingActivities*

                Netcash used in investing activities was $4.7 million in the thirteen weeks ended November 27, 2004compared to $6.5 million in the thirteen weeks ended November 29, 2003. This decrease in cash used was primarily attributable to $1.6 million less inexpenditures for property, plant and equipment in the current year.

*FinancingActivities*

                Netcash used in financing activities was $30.7 million in the thirteen weeks endedNovember 27, 2004 compared to net cash provided by financing activitiesof $7.6 million in the thirteen weeks ended November 29, 2003.  The changewas attributed to a $33.8 million decrease in revolving credit borrowings and a$16.7 million reduction in the overdraft balance, partially offset by a $12.3million decrease in cash distributions for member taxes.

*Utilities Commitment*

Effective December 30, 2004, NBP finalized anagreement with the City of Dodge City, Kansas, whereby in consideration ofcertain improvements made to the City water and wastewater systems, NBP hascommitted to make a series of service charge payments totaling $19.3 millionover a 20 year period.  Payments under the commitment will be $0.8 million infiscal year 2005, $1.2 million in fiscal year 2006, $1.4 million in fiscal year2007, $1.4 million in fiscal year 2008, $1.4 million in fiscal year 2009 withthe balance of $13.1 million to be paid in subsequent years.  

***Bank Covenant Compliance***

USPB's outstanding CoBank term debt of approximately $6.9million is payable in quarterly installments with final payment due in July2011, bearing interest at the 90 day LIBOR index plus 2.50%, adjusted quarterly(4.557% at November 27, 2004 and 4.10% at August 28, 2004).             The debt agreement with CoBank contains certaincovenants which require, among other things:         

•        reporting requirements;                                                                                                    •        a minimum working capital reserve;                                                                               •        a minimum debt service coverageratio (not required if working capital falls above the greater                     of one half theaggregate commitment or $4 million and NBP is in compliance with their loancovenants).           •        a minimum net worth of $70.0million                                                                              •        restrictions on transactions withrelated parties; and,                                                 •        restrictions on dividend payments;

The Company was in compliance with all CoBank debtcovenants as of November 27, 2004. The debt is secured by USPB's interest in NBP. 

Effective November 19, 2004,NBP's amended credit facility was further amended to reflect changes infinancial covenants.  The amended credit facility, as amended, contains thefollowing financial covenants, effective throughout fiscal year 2005:

•        Maximum funded debt to fourquarter rolling EBITDA ratio of 7.25x;           •        Maximum senior secured funded debtto four quarter rolling EBITDA ratio of 4.50x;           •        Minimum four quarter rollingEBITDA of $50 million;           •        Minimum working capital of $92.25million;           •        Maximum annual capitalexpenditures of $30 million.

Beginning with fiscal year 2006, the financialcovenants (except for the limitation on maximum annual capital expenditures)will revert to, and be adjusted in accordance with, those contained in theamended credit facility as in effect immediately prior to the November 19, 2004amendment.  The financial covenants which will be in place in fiscal year 2006under the amended credit facility as of August 6, 2003,will be more restrictive than those covenants in place in fiscal year 2005under the November 19, 2004 amendment and more restrictive than those covenantsin place in fiscal year 2004.

As defined in NBP's amended credit facility, EBITDAcontains specified adjustments.  On November 27, 2004,they were in compliance with all financial covenant ratios.

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**Item 3. Quantitative andQualitative Disclosures About Market Risk.    **

The principal market risks affecting our business areexposure to changes in prices for commodities, such as livestock and boxedbeef, and interest rate risk.

*Commodities.*NBPuses various raw materials, many of which are commodities. Raw materials aregenerally available from several different sources, and we presently believethat we can obtain them as needed.  Commodities are subject to pricefluctuations that may create price risk. When appropriate, NBP may hedgecommodities in order to mitigate this price risk. While this may tend to limitour ability to participate in gains from commodity price fluctuations, it alsotends to reduce the risk of loss from changes in commodity prices. NBP reflectscommodity contract gains and losses as adjustments to the basis of underlyingcommodities purchased; gains or losses are recognized in the statement ofoperations as a component of costs of goods sold.

NBP purchases cattle for use in its processingbusinesses. When appropriate, it enters into forward purchase contracts atprices determined prior to the delivery of the cattle. The commodity price riskassociated with these activities can be hedged by selling (or buying) theunderlying commodity, or by using an appropriate commodity derivativeinstrument. The particular hedging instrument NBP uses depends on a number offactors, including availability of appropriate derivative instruments.

NBP sells commodity beef products in its business.Commodity beef products are subject to price fluctuations that may create pricerisk. When appropriate, NBP enters into forward sales contracts at pricesdetermined prior to shipment. While this may tend to limit its ability toparticipate in gains from commodity price fluctuations, it also tends to reducethe risk of loss from changes in commodity beef prices. NBP reflects commoditycontract gains and losses as adjustments to the basis of underlying commoditiessold; gains or losses are recognized in the statement of operations as acomponent of net sales.

NBP may use futures contracts to reduce exposureassociated with entering into firm commitments to purchase live cattle atprices determined prior to delivery of the cattle as well as firm commitmentsto sell certain beef products at sales prices determined prior to shipment. Inaccordance with SFAS No. 133, *Accounting for Derivative Instruments andHedging Activities*, as amended, NBP accounts for futures contracts andtheir related firm commitments at fair value. Most firm commitments are treatedas "normal purchases and sales" and not marked to market.  SFAS No. 133 imposesextensive recordkeeping requirements in order to treat a derivative instrumentas a hedge for accounting purposes. Derivatives qualify for treatment as hedgeswhen there is a high correlation between the change in fair value of theinstrument and the related change in fair value of the underlying commitment.For derivatives that qualify as effective hedges, the change in fair value hasno net effect on earnings until the hedged transaction affects earnings. Forderivatives that are not designated as hedging instruments, or for theineffective portion of a hedging instrument, the change in fair value doesaffect current period net earnings.

While management believes each of these instrumentshelp mitigate various market risks, they are not designated and accounted foras hedges under SFAS No. 133 as a result of the extensive recordkeepingrequirements of this statement. Accordingly, the gains and losses associatedwith the change in fair value of the instrument and the offsetting gains andlosses associated with changes in the market value of certain of the firmcommitments related to the futures contracts are recorded to income and expensein the period of change.

Thefollowing table describes the number of futures positions and the fair value ofthose positions and related firm commitments at November 27, 2004 and August 28, 2004.  Aposition in live cattle consists of 40,000 pounds.  Firm commitments forpurchase are for live cattle and firm commitments for sales are for boxed beef. (dollars in thousands)

**November 27, 2004**

**Positions expiring within 1 year**

**Fair Value**

Live Cattle

     Futures long 

582 

$

475 

     Futures short 

1,442 

(1,437)

     Firm Commitments Purchase

1,203 

     Firm Commitments Sale

-

**August 28, 2004**

Live Cattle

     Futures long 

-

-

     Futures short

55 

$

96 

     Firm Commitments Purchase

(96)

     Firm Commitments Sale

-

*Interest Rates.*As a result of our normal borrowing and leasing activities, ouroperating results are exposed to fluctuations in interest rates, which wemanage primarily through our regular financing activities. We generally maintainlimited investments in cash and cash equivalents.  

We have short-term and long-term debt with variableinterest rates. Short-term debt is primarily comprised of the current portionof long-term debt maturing twelve months from the balance sheet date. 

                Ourexposure to interest rate risk has not materially changed since November 27, 2004.

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**Item 4.  Controls and Procedures**.**    **

We maintain a systemof controls and procedures designed to provide reasonable assurance as to thereliability of the consolidated financial statements and other disclosuresincluded in this report, as well as to safeguard assets from unauthorized useor disposition. We evaluated the effectiveness of the design and operation ofour disclosure controls and procedures as defined in the Securities ExchangeAct of 1934 Rules 13a-15(e) and 15d-15(e) under supervision and with theparticipation of management, including our Chief Executive Officer and ChiefFinancial Officer. Based upon that evaluation, as of the end of the period coveredby this Quarterly Report on Form 10-Q, our Chief Executive Officer and ChiefFinancial Officer concluded that our disclosure controls and procedures wereeffective in alerting them, in a timely manner, to material informationrequired to be included in our periodic Securities and Exchange Commissionfilings.  There have been no changes in our internal controls over financialreporting during the thirteen weeks ended November 27, 2004 that havematerially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.  The design of any system ofcontrols and procedures is based in part upon certain assumptions about thelikelihood of future events. 

** **
****
** **

** **

** **

**PARTII. OTHER INFORMATION**

**Item 1. Legal Proceedings    **  

     For informationregarding legal proceedings, see Note 4, "Contingencies" to our consolidatedfinancial statements included in Part I - Item 1 of this Form 10-Q.            <back to Table of Contents>

**Item 2. Unregistered Salesof Equity Securities and Use of Proceeds    **

     None.        <back to Table of Contents> 

**Item 3. Defaults Upon SeniorSecurities    **

     None.        <back to Table of Contents> 

**Item 4. Submission ofMatters to a Vote of Security Holders    **

     None.        <back to Table of Contents>

**Item 5. Other Information    **

     None.        <back to Table of Contents> 

**Item 6. Exhibits    **

(A)

Exhibits

10.1 

Waiver and Consent dated as  of October 6, 2004 to the Third Amended and Restated Credit Agreement  (incorporated by reference to Exhibit 10.4(d) to NBP's Annual Report on Form  10-K filed with the Commission on November 23, 2004).

10.2 

Third Amendment dated as of  November 19, 2004 to the Third Amended and Restated Credit Agreement  (incorporated by reference to Exhibit 10.4(e) to NBP's Annual Report on Form  10-K filed with the Commission on November 23, 2004).

10.3 

Aircraft Lease dated as of December 9, 2004 by  and among John R. Miller Enterprises, L.L.C. and National Beef Packing  Company, LLC (incorporated by reference to Exhibit 10.1 to NBP's Current  Report on Form 8-K filed with the Commission on December 9, 2004).

10.4 

Fourth Amended and Restated  Credit Agreement dated as of December   29, 2004 by and between National Beef  Packing Company, LLC and certain agents, lenders and issuers (incorporated by  reference to Exhibit 10.1 to NBP's Current Report on Form 8-K filed with the Commission  on January 6, 2005).

10.5(a)

Lease dated as of December 1,  2004 between City of Dodge City, Kansas and National Beef Packing Company, LLC  securing $102,300,000 City of Dodge City, Kansas Industrial Development  Revenue Bonds Series 2004 (National Beef Packing Company, LLC Project) (incorporated  by reference to Exhibit 10.2 to NBP's Current Report on Form 8-K filed with the Commission  on January 6, 2005).

10.5(b)

Trust Indenture dated as of  December 1, 2004 between City of Dodge City, Kansas and Commerce Bank, N.A.,  as trustee, securing $102,300,000 City of Dodge City, Kansas Industrial  Development Revenue Bonds Series 2004 (National Beef Packing Company, LLC  Project) (incorporated by reference to Exhibit 10.3 to NBP's Current Report on Form 8-K filed with the Commission  on January 6, 2005).

31.1 

Certification of the Chief  Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002.

31.2 

Certification of the Chief  Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002.

32.1 

Certification of the Chief  Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 

Certification of the Chief  Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(B)

Reports on Form 8-K

During the quarterended November 27, 2004, the Company furnished a Report on Form 8-K under Items1 and 9, dated October 6, 2004, relating to our amended debt agreement and anotherReport on Form 8-K under Item 7, dated October 14, 2004, for our quarterlynewsletter.

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** **

**SIGNATURES    **

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

                                                                                                U.S. PremiumBeef, LLC       

By: 

/s/ Steven D. Hunt

Steven D. Hunt*Chief Executive Officer and Manager*

*(Principal Executive Officer)*

By: 

/s/ Lyn   Holtmann

Lyn Holtmann*Chief Financial Officer*

*(Principal Financial and Accounting Officer)*

Date: January 10, 2005 

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