----

 

 **UNITEDSTATES**

**SECURITIES AND EXCHANGE COMMISSION**

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

**FORM 10-Q**

**(Mark one)**

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

 

|                                            |
|-------------------------------------------------|
| **For the quarterly period ended May 29, 2010** |
| **or**                                          |

 

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

 

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

**Commission file number 333-115164**

 **U.S.****PREMIUM BEEF, LLC***(Exact name of registrant as specified in its charter)*

| **DELAWARE**                                                        |   | **20-1576986**                            |
|---------------------------------------------------------------------|--------|-------------------------------------------|
| **(State  or other jurisdiction of incorporation or organization)** |   | **(I.R.S.  Employer Identification No.)** |

**12200  North Ambassador Drive****Kansas  City****, MO 64163****(Addressof principal executive offices)**

 **Telephone:(866) 877-2525(Registrant’stelephone number, including area code)**

Indicate by checkmark whether the registrant (1) has filed all reports required to be filedby Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes þ No o

 Indicate by checkmark whether the registrant has submitted electronically and posted on itscorporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit and post such files).   Yes o No o

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer,a non-accelerated filer or a small reporting company.  See definition of “largeaccelerated filer”, “accelerated filer”, and “smaller reporting company” inRule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer o   | Accelerated Filer o  | Non-Accelerated Filer þ |  Small Reporting Company o |
|---------------------------------------|---------------------------|------------------------------|---------------------------------|

Indicateby check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes o No þ

The registrant’s unitsare not traded on an exchange or in any public market.  As of June 26, 2010,there were 735,385 Class A units and 755,385 Class B unitsoutstanding.     

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|                  | TABLE OF CONTENTS

                                                                     |         |
|-----------------------|----------------------------------------------------------------------------------------------|--------------|
| PART I.               | FINANCIAL INFORMATION                                                                        | **Page No.** |
|                  |                                                                                         |         |
| Item 1.               | Financial Statements.                                                                        | 1            |
|                  |                                                                                         |         |
| Item 2.               | Management’s  Discussion and Analysis of Financial Condition and Results of Operations. | 11           |
|                  |                                                                                         |         |
| Item 3.               | Quantitative and Qualitative Disclosures About Market Risk.                                  | 16           |
|                  |                                                                                         |         |
| Item 4.               | Controls and Procedures.                                                                     | 17           |
|                  |                                                                                         |         |
|                  |                                                                                         |         |
| PART II.              | OTHER INFORMATION                                                                            |         |
|                  |                                                                                         |         |
| Item 1.               | Legal Proceedings.                                                                           | 19           |
|                  |                                                                                         |         |
|    Item 1A. | Risk Factors.                                                                                | 19           |
|                  |                                                                                         |         |
| Item 2.               | Unregistered Sales of Equity Securities and Use of Proceeds.                                 | 19           |
|                  |                                                                                         |         |
| Item 3.               | Defaults Upon Senior Securities.                                                             | 19           |
|                  |                                                                                         |         |
| Item 4.               | Submission of Matters to a Vote of Security Holders.                                         | 19           |
|                  |                                                                                         |         |
| Item 5.               | Other Information.                                                                           | 19           |
|                  |                                                                                         |         |
| Item 6.               | Exhibits.                                                                                    | 19           |
|                  |                                                                                         |         |
|                  | Signatures.                                                                                  | 20           |

 

 

Unless the context indicates orotherwise requires, the terms “the Company”, “we”, “our” and “us” refer to U.S.Premium Beef, LLC (formerly known as U.S. Premium Beef, Ltd.) and itsconsolidated subsidiaries. As used in this report, the terms “NBP” and“National Beef” refer to National Beef Packing Company, LLC (formerly known asFarmland National Beef Packing Company, LP), a Delaware limited liabilitycompany, and “USPB” refers to U.S. Premium Beef, LLC (formerly known U.S.Premium Beef, Ltd.) prior to consolidation. 

**                                                                                               **

| ii |
|----|

 

----

 

 

 

 

 

 

**PART I.  FINANCIAL INFORMATION**

** **

**Item 1.  Financial Statements.**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

| 1 |
|---|

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                       |
|--------------------------------------------------------------------------------------------|
| **Consolidated Balance Sheets**                                                  |
| (in thousands, except unit data)                                       |
|                                                                                       |   |   | **May 29,** |   | **August 29,** |
| **Assets**                                                                                 | **2010** |   | **2009** |
|                                                                                       |   |   | **(unaudited)** |   |   |
| Current assets:                                                                       |   |   |   |
|                                                                                       | Cash and cash equivalents | $ | 24,744  |   | $ | 18,853  |
|                                                                                       | Accounts receivable, less allowance for returns and doubtful accounts |   |   |   |
|                                                                                       |   | of $3,391 and $1,511, respectively | 205,786  |   | 172,421  |
|                                                                                       | Due from affiliates | 3,886  |   | 4,586  |
|                                                                                       | Other receivables | 7,070  |   | 7,165  |
|                                                                                       | Inventories | 216,706  |   | 175,300  |
|                                                                                       | Other current assets | 18,596  |   | 16,602  |
|                                                                                       |   | Total current assets | 476,788  |   | 394,927  |
| Property, plant, and equipment, at cost                           | 527,330  |   | 499,977  |
|                                                                                       | Less accumulated depreciation | 210,688  |   | 175,103  |
|                                                                                       |   | Net property, plant, and equipment | 316,642  |   | 324,874  |
| Goodwill                                                                                   | 86,251  |   | 86,251  |
| Other intangible assets, net of accumulated amortization     |   |   |   |
|                                                                                       | of $15,147 and $12,123, respectively | 59,589  |   | 62,302  |
| Other assets                                                                          | 5,473  |   | 4,594  |
|                                                                                       |   | Total assets | $ | 944,743  |   | $ | 872,948  |
|                                                                                       |   |   |   |   |   |
| **Liabilities and Capital Shares and Equities**                   |   |   |   |
| Current liabilities:                                                                  |   |   |   |
|                                                                                       | Current installments of long-term debt | $ | 7,665  |   | $ | 12,488  |
|                                                                                       | Cattle purchases payable | 63,100  |   | 49,806  |
|                                                                                       | Accounts payable - trade | 66,691  |   | 69,303  |
|                                                                                       | Due to affiliates | 1,128  |   | 1,048  |
|                                                                                       | Accrued compensation and benefits | 65,472  |   | 56,553  |
|                                                                                       | Accrued insurance | 15,162  |   | 16,344  |
|                                                                                       | Other accrued expenses and liabilities | 12,333  |   | 15,160  |
|                                                                                       | Distributions payable | 28,606  |   | 10,942  |
|                                                                                       |   | Total current liabilities | 260,157  |   | 231,644  |
| Long-term liabilities:                                                                |   |   |   |
|                                                                                       | Long-term debt, excluding current installments | 280,373  |   | 293,400  |
|                                                                                       | Other liabilities | 2,155  |   | 2,364  |
|                                                                                       |   | Total long-term liabilities | 282,528  |   | 295,764  |
|                                                                                       |   | Total liabilities | 542,685  |   | 527,408  |
|                                                                                       | Noncontrolling interest in NBP | 264,371  |   | 183,407  |
| Capital shares and equities:                                                |   |   |   |
|                                                                                       | Members' capital, 735,385 Class A units and 755,385 Class B units |   |   |   |
|                                                                                       |   | authorized, issued and outstanding | 86,350  |   | 111,085  |
|                                                                                       | Patronage notices | 48,682  |   | 48,682  |
|                                                                                       | Accumulated other comprehensive income (loss) attributable to USPB | 6  |   | (1) |
|                                                                                       |   | Total capital shares and equities attributable to USPB | 135,038  |   | 159,766  |
|                                                                                       | Noncontrolling interest in Kansas City Steak Company, LLC | 2,649  |   | 2,367  |
|                                                                                       |   | Total Capital Shares and Equities | 137,687  |   | 162,133  |
| Commitments and contingencies                                                    | -  |   | -  |
|                                                                                       |   | Total liabilities, noncontrolling interest in NBP and capital shares and equities | $ | 944,743  |   | $ | 872,948  |
|                                                                                       |   |   |   |   |   |
| See accompanying notes to consolidated financial statements. |   |   |   |

** **

** **

| 2 |
|---|

                                                                                                

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                           |
|------------------------------------------------------------------------------------------------|
| **Consolidated Statements of Operations**                                       |
| (in thousands, except per unit and per unit data)      |
|                                                                                           |   |   |   |   |   |   | **13 weeks ended** |   | **13 weeks ended** |   | **39 weeks ended** |   | **39 weeks ended** |
|                                                                                           |   |   |   |   |   |   | **May 29, 2010** |   | **May 30, 2009** |   | **May 29, 2010** |   | **May 30, 2009** |
|                                                                                           |   |   |   |   |   |   | **(unaudited)** |   | **(unaudited)** |   | **(unaudited)** |   | **(unaudited)** |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                                                 |   |   |   |   | $ | 1,537,879  |   | $ | 1,318,020  |   | $ | 4,221,415  |   | $ | 4,045,215  |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                                           | Cost of sales |   |   |   | 1,429,435  |   | 1,242,304  |   | 3,962,607  |   | 3,882,639  |
|                                                                                           | Selling, general, and administrative expenses |   |   | 14,734  |   | 12,426  |   | 41,520  |   | 35,333  |
|                                                                                           | Depreciation and amortization |   |   |   | 13,320  |   | 11,948  |   | 39,303  |   | 33,186  |
|                                                                                           |   | Total costs and expenses |   |   |   | 1,457,489  |   | 1,266,678  |   | 4,043,430  |   | 3,951,158  |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   | Operating income |   |   |   | 80,390  |   | 51,342  |   | 177,985  |   | 94,057  |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                                                              |   |   |   |   |   |   |   |   |   |   |
|                                                                                           | Interest income |   |   |   | 6  |   | 47  |   | 43  |   | 291  |
|                                                                                           | Interest expense |   |   |   | (3,539) |   | (5,884) |   | (11,640) |   | (18,337) |
|                                                                                           | Equity in loss of aLF Ventures, LLC |   |   |   | -  |   | (8) |   | -  |   | (57) |
|                                                                                           | Termination Fee |   |   |   | -  |   | -  |   | -  |   | 14,572  |
|                                                                                           | Other, net |   |   |   | 256  |   | (585) |   | (3,524) |   | (4,431) |
|                                                                                           |   |   | Income before taxes |   |   |   | 77,113  |   | 44,912  |   | 162,864  |   | 86,095  |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense                                                                   |   |   |   | (376) |   | (380) |   | (728) |   | (941) |
|                                                                                           |   |   | Net income |   |   |   | 76,737  |   | 44,532  |   | 162,136  |   | 85,154  |
| Less: Net income attibutable to noncontrolling interest in: |   |   |   |   |   |   |   |
|                                                                                           | Kansas City Steak Company, LLC |   |   |   | (58) |   | (232) |   | (850) |   | (950) |
|                                                                                           | National Beef Packing Company, LLC |   |   |   | (24,687) |   | (16,608) |   | (52,595) |   | (28,327) |
| Net income attributable to U.S. Premium Beef, LLC           |   |   | $ | 51,992  |   | $ | 27,692  |   | $ | 108,691  |   | $ | 55,877  |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per unit:                                                                   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           | Basic |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   | Class A units |   |   |   | $ | 7.07  |   | $ | 12.43  |   | $ | 22.75  |   | $ | 25.07  |
|                                                                                           |   | Class B units |   |   |   | $ | 61.95  |   | $ | 25.23  |   | $ | 121.74  |   | $ | 50.91  |
|                                                                                           | Diluted |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   | Class A units |   |   |   | $ | 6.96  |   | $ | 12.24  |   | $ | 22.38  |   | $ | 24.70  |
|                                                                                           |   | Class B units |   |   |   | $ | 61.95  |   | $ | 24.84  |   | $ | 121.74  |   | $ | 50.16  |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding weighted-average Class A and Class B units:     |   |   |   |   |   |   |   |
|                                                                                           | Basic |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   | Class A units |   |   |   | 735,385  |   | 735,385  |   | 735,385  |   | 735,385  |
|                                                                                           |   | Class B units |   |   |   | 755,385  |   | 735,385  |   | 755,385  |   | 735,385  |
|                                                                                           | Diluted |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   | Class A units |   |   |   | 747,471  |   | 746,838  |   | 747,471  |   | 746,435  |
|                                                                                           |   | Class B units |   |   |   | 755,385  |   | 746,838  |   | 755,385  |   | 746,435  |
| See accompanying notes to consolidated financial statements.     |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |

** **

| 3 |
|---|

                                                                                                

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                         |
|----------------------------------------------------------------------------------------------|
| **Consolidated Statements of Cash Flows**                                |
| (in thousands)                                                                          |
|                                                                                         |   |   |   |   |   | **39 weeks ended** |   | **39 weeks ended** |
|                                                                                         |   |   |   |   |   | **May 29, 2010** |   | **May 30, 2009** |
|                                                                                         |   |   |   |   |   | **(unaudited)** |   | **(unaudited)** |
| Cash flows from operating activities:                                    |   |   |   |   |
|                                                                                         | Net income |   |   | $ | 162,136  |   | $ | 85,154  |
|                                                                                         | Adjustments to reconcile net income to net cash provided by |   |   |   |   |
|                                                                                         |   | operating activities: |   |   |   |   |
|                                                                                         |   | Depreciation and amortization |   | 40,075  |   | 33,186  |
|                                                                                         |   | Termination fee |   | -  |   | (14,572) |
|                                                                                         |   | (Gain) loss on disposal of property, plant, and equipment |   | (154) |   | 119  |
|                                                                                         |   | Write-off of debt issuance costs |   | 418  |   | 1,317  |
|                                                                                         |   | Changes in assets and liabilities: |   |   |   |   |
|                                                                                         |   |   | Accounts receivable |   | (33,365) |   | 29,192  |
|                                                                                         |   |   | Due from affiliates |   | 702  |   | 3,771  |
|                                                                                         |   |   | Other receivables |   | 95  |   | (2,316) |
|                                                                                         |   |   | Inventories |   | (41,406) |   | 11,702  |
|                                                                                         |   |   | Other assets |   | (3,357) |   | (3,990) |
|                                                                                         |   |   | Cattle purchases payable |   | 5,505  |   | 7,767  |
|                                                                                         |   |   | Accounts payable |   | (1,680) |   | (4,542) |
|                                                                                         |   |   | Due to affiliates |   | 78  |   | (99) |
|                                                                                         |   |   | Accrued compensation and benefits |   | 8,919  |   | (10,443) |
|                                                                                         |   |   | Accrued insurance |   | (1,182) |   | (87) |
|                                                                                         |   |   | Other accrued expenses and liabilities |   | (3,060) |   | 7,591  |
|                                                                                         |   |   |   | Net cash provided by operating activities |   | 133,724  |   | 143,750  |
| Cash flows from investing activities:                                    |   |   |   |   |
|                                                                                         | Capital expenditures, including interest capitalized |   | (28,867) |   | (35,600) |
|                                                                                         | Termination fee |   | -  |   | 14,572  |
|                                                                                         | Proceeds from sale of property, plant, and equipment |   | 974  |   | 1,240  |
|                                                                                         |   | Net cash used in investing activities |   | (27,893) |   | (19,788) |
| Cash flows from financing activities:                                    |   |   |   |   |
|                                                                                         | Net receipts under revolving credit lines |   | 3,718  |   | 62,723  |
|                                                                                         | Borrowings under term note payable |   | 75,000  |   | -  |
|                                                                                         | Payments of term notes payable |   | (23,875) |   | (26,485) |
|                                                                                         | Repayments of other indebtedness / capital leases |   | (5,838) |   | (3,104) |
|                                                                                         | Purchase and cancellation of senior notes |   | (66,855) |   | (45,479) |
|                                                                                         | Member capital redeemed |   | -  |   | (125,484) |
|                                                                                         | Payments of patronage notices |   | -  |   | (1,960) |
|                                                                                         | Minority owner capital contribution |   | -  |   | 19,643  |
|                                                                                         | Cash paid for financing costs |   | (1,017) |   | -  |
|                                                                                         | Change in overdraft balances |   | 6,883  |   | (1,750) |
|                                                                                         | Distributions to noncontrolling interests in National Beef Packing Company, LLC | (32,531) |   | (22,395) |
|                                                                                         | Member distributions |   | (55,432) |   | (42,093) |
|                                                                                         |   |   |   | Net cash used in financing activities |   | (99,947) |   | (186,384) |
|                                                                                         | Effect of exchange rate changes on cash |   | 7  |   | (32) |
|                                                                                         |   |   |   | Net change in cash |   | 5,891  |   | (62,454) |
| Cash and cash equivalents at beginning of the period |   | 18,853  |   | 77,399  |
| Cash and cash equivalents at end of the period       |   | $ | 24,744  |   | $ | 14,945  |
| Supplemental cash disclosures:                                                     |   |   |   |   |
|                                                                                         | Cash paid during the period for interest |   | $ | 11,369  |   | $ | 15,916  |
|                                                                                         | Cash paid/(received) during the period for taxes, net of $0 and $925 refunds, | $ | 779  |   | $ | (729) |
|                                                                                         |   | respectively |   |   |   |   |
| See accompanying notes to consolidated financial statements.   |   |   |   |   |

** **

| 4 |
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**U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**(1)Interim Financial Statements**

**Basisof Presentation**

The accompanying unaudited Consolidated FinancialStatements have been prepared in accordance with U.S. generally acceptedaccounting principles (GAAP) for interim financial information; therefore, theydo not include all of the information and footnotes required by GAAP forcomplete financial statements. In the opinion of management, all adjustmentsconsidered necessary for a fair presentation have been included usingmanagement’s best estimates and judgments where appropriate.  These estimatesand judgments affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements.  The estimates and judgments will also affect the reported amountsfor certain revenues and expenses during the reporting period.  Actual resultscould differ materially from these estimates and judgments.  For furtherinformation, refer to the audited Consolidated Financial Statements and Notesto Consolidated Financial Statements, which are included in the Company’s AnnualReport on Form 10-K on file with the Securities and Exchange Commission (SEC)for the fiscal year ended August 29, 2009.  The results of operations for theinterim periods presented are not necessarily indicative of the results for afull fiscal year.  

**(2)New Accounting Pronouncements**

On June 29, 2009, the Financial Accounting StandardsBoard (FASB) issued *FASB Accounting Standards Codification* (ASC) underASC 105-10 as the source of authoritative accounting principles recognized bythe FASB to be applied by nongovernmental entities.  This pronouncement waseffective for financial statements issued for interim and annual periods endingafter September 15, 2009 for most entities.  On the effective date, all non-SECaccounting and reporting standards were superseded.  Rules and interpretivereleases of the SEC under the authority of federal securities laws are alsosources of authoritative U.S. GAAP for SEC registrants.  All other accountingliterature is considered non-authoritative.  The switch to ASC affects themanner in which companies refer to U.S. GAAP in financial statements and notedisclosures.  The Company adopted this body of accounting for the quarterlyperiod ended November 28, 2009, as required, and adoption did not have amaterial impact on our consolidated financial statements taken as a whole.  

In December 2007, the FASB issued *BusinessCombinations*under ASC 805.* *This statement requires an acquirer torecognize the assets acquired, the liabilities assumed, and any noncontrollinginterest in the acquiree at the acquisition date to be measured at their fairvalue as of that date.  An acquirer is required to recognize assets or liabilitiesarising from all other contingencies (contractual contingencies) as of theacquisition date, measured at their acquisition-date fair values, only if it ismore likely than not that they meet the definition of an asset or a liabilityin FASB Concepts Statement No. 6, *Elements of Financial Statements.*  Anyacquisition-related costs are to be expensed instead of capitalized.  TheCompany adopted ASC 805 on August 30, 2009 and the impact will depend on futureacquisitions at the time.

Also in December 2007, the FASB issued *NoncontrollingInterests in Consolidated Financial Statements - an Amendment of ARB No. 51*under ASC 810-10-65, which establishes accounting and reporting standards forthe noncontrolling interest (minority interest) in a subsidiary.  ASC810-10-65 requires non-controlling interests held by parties other than theparent in subsidiaries be clearly identified, labeled, and presented in theconsolidated balance sheet within equity, but separate from the parent'sequity.  The Company’s adoption of ASC 810-10-65 as of August 30,2009 changed the presentation of the non-controlling interest.

In February 2008, the FASB issued *Fair ValueMeasurements* under ASC 820-10, which deferred the effective date of fairvalue measurement for nonfinancial assets and nonfinancial liabilities, exceptfor items that are recognized or disclosed at fair value in an entity’sfinancial statements on a recurring basis, at least annually.   There was noimpact when the Company adopted for these nonfinancial assets and nonfinancialliabilities on August 30, 2009.  These assets and liabilities are measured atfair value on an ongoing basis but are reported at fair value only in certain circumstances. 

| 5 |
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**(3)Inventories**

Inventories consist primarily of meat products andsupplies.  Product inventories are considered commodities and are recordedbased on quoted commodity prices, which approximate net realizable value. Supply and other inventories are valued on the basis of first-in, first-out,specific or average cost methods.  Product inventories are relieved frominventory utilizing the first-in, first-out method.

Inventories at May 29, 2010 and August 29, 2009 consistedof the following (in thousands):

|                                                | **May 29, 2010** |         | **August 29, 2009** |
|-----------------------------------------------------|----------------------------|--------------|-------------------------------|
|                                                |                       |         |                          |   |
| Dressed and boxed meat products |                       | $            | 141,139                  |   | $ | 119,274  |
| Beef by-products                               |                       | 39,546  |                          | 29,756  |
| Supplies and other                        |                       | 36,021  |                          | 26,270  |
|                                                |                       | $            | 216,706                  |   | $ | 175,300  |
|                                                |                       |         |                          |   |

**(4)Comprehensive Income Attributable to USPB**

Comprehensive income, which consists of net income andforeign currency translation adjustments, was as follows for the periodsindicated (in thousands): 
|                                                                                          |                                                    |                      | **13 weeks ended** |         | **13 weeks ended** |     | **39 weeks ended** |          | **39 weeks ended** |
|-----------------------------------------------------------------------------------------------|---------------------------------------------------------|---------------------------|------------------------------|--------------|------------------------------|----------|------------------------------|---------------|------------------------------|
|                                                                                          |                                                    |                      | **May 29, 2010**   |         | **May 30, 2009**   |     | **May 29, 2010**   |          | **May 30, 2009**   |
| Net income                                                                               | $                                                       | 76,737               |                         | $            | 44,532                  |     | $                            | 162,136  |                         | $ | 85,154  |
| Other comprehensive (loss) income:                                             |                                                    |                      |                         |         |                         |     |                         |
|                                                                                          | Foreign currency translation adjustments | (11)                      |                         | 42      |                         | (7)      |                         | (32)          |
|                                                                                          |                                                    | Comprehensive income | $                            | 76,726  |                         | $        | 44,574                  |          | $                            | 162,129  |   | $ | 85,122  |
| Comprehensive income attibutable to noncontrolling interest in: |                                                    |                      |                         |         |                         |     |                         |
|                                                                                          | Kansas City Steak Company, LLC      | (58)                      |                         | (232)        |                         | (850)    |                         | (950)         |
|                                                                                          | National Beef Packing Company, LLC  | (24,687)                  |                         | (16,608)     |                         | (52,595) |                         | (28,327)      |
| Comprehensive income attributable to USPB                                 | $                                                       | 51,981               |                         | $            | 27,734                  |     | $                            | 108,684  |                         | $ | 55,845  |
|                                                                                          |                                                    |                      |                         |         |                         |     |                         |          |                         |

** (5)Noncontrolling Interests In NBP**

At any time after certaindates, the earliest being July 31, 2010, the latest being July 31, 2011, NBP’sChief Executive Officer, Timothy M. Klein (Klein Affiliates), and/or NBPCoHoldings have the right to request that NBP repurchase their interests in NBP,the value of which is to be determined by a specified formula or a mutuallyagreed appraisal process.  If NBP is unable to effect the repurchase within aspecified time, the requesting member(s) have the right to cause a sale processto commence.

GAAPrequires the Company to determine the fair value of the noncontrollinginterests in NBP at the end of each reporting period.  To the extent this valueincreases, the change in fair value is accreted over the redemption period.  Indetermining the fair value of the noncontrolling interests in NBP held by NBPCoHoldings as of May 29, 2010, management has considered previous redemptionprices, valuations of peer companies and other factors.  A portion of the KleinAffiliates’ noncontrolling interest in NBP as of May 29, 2010 was valued basedupon the redemption that occurred on June 2, 2010, as described in Note 10below.  The remaining noncontrolling interest in NBP held by the KleinAffiliates as of May 29, 2010 was valued based upon a contractually stipulatedvaluation formula.

TheCompany accounts for changes in the redemption value of the noncontrolling interestsin NBP by accreting the change in value from the date of change through theearliest redemption date of the respective interests in NBP.  At May 29, 2010,the value of the noncontrolling interests in NBP was determined to be $295.4million, which was in excess of its carrying value.  Accordingly, the carryingvalue of the noncontrolling interests in NBP increased by approximately $31.2million through accretion during the thirty-nine weeks ended May 29, 2010,resulting in the $264.4 million carrying value, as reflected in theaccompanying consolidated balance sheet as of May 29, 2010. 

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Thetotal value of the noncontrolling interests in NBP at May 29, 2010 increased byapproximately $54.9 million compared to the value at August 29, 2009.  Offsettingthe change in the value of the noncontrolling interests in NBP is acorresponding change in members’ capital. 

**(6)Contingencies**

National BeefLeathers, LLC (NBL), a wholly-owned subsidiary of NBP, is a nameddefendant in two currently pending purported class actions involving NBL'stannery located in St. Joseph, Missouri, which NBL purchased in March 2009. These lawsuits were filed on July 22, 2009 in the U.S. District Court forthe Western District of Missouri.  The lawsuits allege that NBL spreadwastewater sludge containing hexavalent chromium in four counties in northwestMissouri. The plaintiffs are seeking an unspecified amount of damages foreconomic damages, punitive damages, diminished property values and medicalmonitoring. On May 11, 2010, the court issued an order ruling that NBL is notliable under a successor liability theory for the conduct of the tannery’sprevious owner and another party prior to NBL’s purchase of the tannery.   As aresult of this ruling, the plaintiffs in 15 lawsuits filed between April 22,2009 and April 29, 2010, in the Circuit Courts of Buchannan County, ClintonCounty, and DeKalb County, Missouri seeking damages for economic damages,punitive damages, diminished property values and medical monitoring voluntarilydismissed their claims against NBL in June 2010.  NBL believes it hasmeritorious defenses to the claims in the remaining two lawsuits and intends todefend them vigorously. 

NBP is a party to a number of other lawsuits andclaims arising out of the operation of its business. Management believes theultimate resolution of such matters should not have a material adverse effecton the Company's financial condition, results of operations or liquidity.

**(7)Fair Value Measurements**

The Company determines fair value utilizing athree-level fair value hierarchy that prioritizes the inputs used to measurefair value.  The fair value hierarchy gives the highest priority to quotedmarket prices (Level 1) and the lowest priority to unobservable inputs (Level3).  The three levels of inputs used to measure fair value are as follows:
    -  Level 1 – quoted prices in active markets foridentical assets or liabilities accessible by the reporting entity. 
    -  Level 2 – observable inputs other than quoted pricesincluded in Level 1, such as quoted prices for similar assets and liabilitiesin active markets; quoted prices for identical or similar assets andliabilities in markets that are not active; or other inputs that are observableor can be corroborated by observable market data.
    -  Level 3 – unobservable inputs for an asset orliability.  Unobservable inputs should only be used to the extent observableinputs are not available.

The following table details the assets and liabilitiesmeasured at fair value on a recurring basis as of May 29, 2010 and August 29,2009 and also the level within the fair value hierarchy used to measure eachcategory of assets (in thousands).

 

 

 

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|                                              |   |                          |          | **Quoted Prices in**   |   |                       |   |                           |
|---------------------------------------------------|--------|-------------------------------|---------------|----------------------------------|--------|----------------------------|--------|--------------------------------|
|                                              |   |                          |          | **Active Markets for** |   | **Significant Other** |   | **Significant**                |
|                                              |   |                          |          | **Identical Assets**        |   | **Observable Inputs** |   | **Unobservable**               |
| **Description**                                   |   | **May 29, 2010**    |          | **(Level 1)**               |   | **(Level 2)**         |   | **Inputs (Level 3)** |
|                                              |   |                          |          |                             |   |                       |   |                           |
|                                              |   |                          |          |                             |   |                       |   |                           |
| Other current assets - derivatives |   | $                             | 4,629    |                             | $      | 4,629                 |   | $                              | -  |   | $ | -  |
|                                              |   |                          |          |                             |   |                       |   |                           |
| Other accrued expenses and         |   |                          |          |                             |   |                       |   |                           |
| liabilities - derivatives               |   | $                             | 3,008    |                             | $      | 261                   |   | $                              | 2,747  |   | $ | -  |
|                                              |   |                          |          |                             |   |                       |   |                           |
| Noncontrolling interests in NBP    |   | $                             | 264,371  |                             | $      | -                     |   | $                              | 61,963  |   | $ | 202,408  |
|                                              |   |                          |          |                             |   |                       |   |                           |
|                                              |   |                          |          | **Quoted Prices in**   |   |                       |   |                           |
|                                              |   |                          |          | **Active Markets for** |   | **Significant Other** |   | **Significant**                |
|                                              |   |                          |          | **Identical Assets**        |   | **Observable Inputs** |   | **Unobservable**               |
| **Description**                                   |   | **August 29, 2009** |          | **(Level 1)**               |   | **(Level 2)**         |   | **Inputs (Level 3)** |
|                                              |   |                          |          |                             |   |                       |   |                           |
|                                              |   |                          |          |                             |   |                       |   |                           |
| Other current assets - derivatives |   | $                             | 1,442    |                             | $      | 1,442                 |   | $                              | -  |   | $ | -  |
|                                              |   |                          |          |                             |   |                       |   |                           |
| Other accrued expenses and         |   |                          |          |                             |   |                       |   |                           |
| liabilities - derivatives               |   | $                             | 5,087    |                             | $      | 3,535                 |   | $                              | 1,552  |   | $ | -  |
|                                              |   |                          |          |                             |   |                       |   |                           |
| Noncontrolling interests in NBP    |   | $                             | 183,407  |                             | $      | -                     |   | $                              | 183,407  |   | $ | -  |
|                                              |   |                          |          |                             |   |                       |   |                           |

 Management has used certain agreed-upon redemptionprices in measuring the fair value of the Klein Affiliates noncontrollinginterest in NBP, which is classified as level 2 as of May 29, 2010.  NBPCoHoldings shares are based upon unobservable inputs, thus classified as level 3as of May 29, 2010.  Management has used certain agreed-upon redemption pricesin measuring the noncontrolling interest in NBP as of August 29, 2009.  Duringthe 3 months ended May 29, 2010 we have transferred the calculated fair valueof NBPCo’s noncontrolling interests in NBP from level 2 to level 3 based uponthe change in valuation techniques due to the amount of time lapsed and changesin business from the previous agreed-upon redemption price.

**(8)Disclosure about Derivative Instruments and Hedging Activities**

As part of NBP’s ongoing operations, NBP is exposed to market risks such as changes in commodity prices.  To manage these risks, NBP may enter into the following derivative transactions pursuant to its established policies:
    -  Forward purchase contracts for cattle for use in the beefplants
    -  Exchange traded futures contracts for cattle 
    -  Exchange traded futures contracts for grain 

While management believes each of these instrumentshelps mitigate various market risks, they are not designated and accounted foras hedges as a result of the extensive recordkeeping requirements associatedwith hedge accounting.  Accordingly, the gains and losses associated with thechange in fair value of the instruments are recorded to net sales and cost of salesin the period of change.  Certain firm commitments for live cattle purchasesand all firm commitments for boxed beef sales are treated as normal purchasesand sales and not recorded at fair value.

NBP enters into certain commodity derivatives, primarilywith a diversified group of highly rated counterparties.  The maximum amount ofloss due to the credit risk of the counterparties, should the counterpartiesfail to perform according to the terms of the contracts, is deemed to beimmaterial as of May 29, 2010 as all derivatives in an asset position areexchange-traded contracts.  The exchange-traded contracts have been enteredinto under a master netting agreement, and are netted on the consolidatedbalance sheets.  None of the derivatives entered into have credit-relatedcontingent features.  NBP has $3.4 million in cash collateral posted on itsderivative liabilities.

 

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The following table presents the fair values as discussed in Note 7 and otherinformation regarding derivative instruments not designated as hedginginstruments as of May 29, 2010 and August 29, 2009 (in thousands of dollars):

 

 
| **May 29, 2010**    | **Derivative Asset** |                   | **Derivative Liability** |
|-------------------------------|---------------------------|------------------------|-------------------------------|
|                          |                      | **Balance Sheet** |                          |   |   | **Balance Sheet** |   |   |
|                          |                      | **Location**           |                          | **Fair Value** |   | **Location** |   | **Fair Value** |
|                          |                      |                   |                          |   |   |   |   |   |   |   |
|                          |                      |                   |                          |   |   |   |   | Accrued expenses |   |   |
|                          |                      | Other current     |                          |   |   |  and other  |   |   |
| Commodity contracts      | assets                    |                   | $                             | 4,629  |   | liabilities |   | $ | 3,008  |
|                          | Total                     |                   |                          |   |   | $ | 4,629  |   |   |   | $ | 3,008  |
| **August 29, 2009** | **Derivative Asset** |                   | **Derivative Liability** |
|                          |                      | **Balance Sheet** |                          |   |   | **Balance Sheet** |   |   |
|                          |                      | **Location**           |                          | **Fair Value** |   | **Location** |   | **Fair Value** |
|                          |                      |                   |                          |   |   |   |   |   |   |   |
|                          |                      |                   |                          |   |   |   |   | Accrued expenses |   |   |
|                          |                      | Other current     |                          |   |   |  and other |   |   |
| Commodity contracts      | assets                    |                   | $                             | 1,442  |   |  liabilities |   | $ | 5,087  |
|                          | Total                     |                   |                          |   |   | $ | 1,442  |   |   |   | $ | 5,087  |

 

Thefollowing table presents the impact of derivative instruments on the ConsolidatedStatement of Operations for the thirteen and thirty-nine week period ended May29, 2010 (in thousands of dollars):
| ** **                          |   |                                       |   |                                                             |     |      |                     |    |                     |   |   |
|-------------------------------------|--------|--------------------------------------------|--------|------------------------------------------------------------------|----------|-----------|--------------------------|---------|--------------------------|--------|--------|
| **Derivatives Not**            |   | **Location of Gain (Loss)** |   |                                                             |     |      |
| **Designated as Hedging** |   | **Recognized in Income on** |   | **Amount of Gain (Loss) Recognized in** |
| **Instruments**                     |   | **Derivatives**                            |   | **Income On Derivatives**                              |
|                                |   |                                       |   |                                                             |     |      | 13 weeks ended |    | 39 weeks ended |
|                                |   |                                       |   |                                                             |     |      | May 29, 2010   |    | May 29, 2010   |
|                                |   |                                       |   |                                                             |     |      |                     |    |                     |
| Commodity contracts            |   | Net sales                             |   | $                                                                | (11,866) |      | $                        | (8,697) |
| Commodity contracts            |   | Cost of sales                    |   | 8,794                                                       |     | 857  |
|                                | Total  |                                       |   |                                                             | $        | (3,072)   |                     | $       | (7,840)                  |
|                                |   |                                       |   |                                                             |     |      |                     |    |                     |

** (9)Income Attributable to USPB Per Unit**

Under the LLC structure, earnings of the Company areto be distributed to unitholders based on their proportionate share ofunderlying equity, and, as a result, income attributable to USPB per unit (EPU)has been presented in the accompanying Consolidated Statement of Operations andin the table that follows.

Basic EPU excludesdilution and is computed by first allocating a portion of net income attributableto USPB to Class A units and the remainder is allocated to Class B units. OnNovember 2, 2009, the Company’s members approved changing the allocation ofincome from 33% to the Class A’s and 67% to the Class B’s to 10% to the ClassA’s and 90% to the Class B’s.  Accordingly, for the thirteen week period ended May29, 2010, the pro-rata share of income earned was allocated 10% to the ClassA’s and 90% to the Class B’s.  For the thirty-nine week period ended May 29,2010, the pro-rata share of income earned through November 1, 2009 wasallocated 33% to the Class A’s and 67% to the Class B’s and the remainder ofthe income for the thirty-nine week period was allocated 10% to the Class A’sand 90% to the Class B’s.  Income allocated to the Class A and Class B units isthen divided by the weighted-average number of Class A and Class B unitsoutstanding for the period to determine the basic EPU for each respective classof unit.   On March 27, 2010, the Class A and Class B units were de-linked,allowing the transfer of each class of units without a concurrent transfer of aunit of the other Class.

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Diluted EPU reflects the potential dilution that couldoccur if potential Class A unit purchase rights were exercised or contractualappreciation rights were converted into units.   Upon termination of the CEOemployment agreement and until eighteen months after the termination of the CEOemployment agreement, at the election of the CEO, or upon mutual agreement ofthe Board of the Company and the CEO, the CEO may purchase up to 20,000 Class Aunits, or upon agreement of the CEO and the Board of the Company, the CEO mayconvert the contractual unit appreciation rights to up to 20,000 Class Aunits.  The diluted EPU reflects the circumstances of termination of the CEOemployment agreement, and the election of CEO or agreement by the Board of theCompany and the CEO for the CEO to purchase or convert contractual rights tothe maximum 20,000 Class A units at $55 per unit for the periods as provided inthe CEO employment agreement.  

 
| **Income Per Unit Calculation**                                               |                         |                         |                       |                         |                       |                         |                       |
|----------------------------------------------------------------------------------------------|------------------------------|------------------------------|----------------------------|------------------------------|----------------------------|------------------------------|----------------------------|
|                                                                                         |                         | **13 weeks ended** |                       | **13 weeks ended** |                       | **39 weeks ended** |                       | **39 weeks ended** |
| (In thousands, except unit and per unit data)             | **May 29, 2010**   |                         | **May 30, 2009** |                         | **May 29, 2010** |                         | **May 30, 2009** |
|                                                                                         |                         | (unaudited)                  |                       | (unaudited)                  |                       | (unaudited)                  |                       | (unaudited) |
| **Basic income per unit**                                                     |                         |                         |                       |                         |                       |                         |                       |
| Income attributable to USPB available to                            |                         |                         |                       |                         |                       |                         |                       |
|                                                                                         | unitholders (numerator) | $                            | 51,992                |                         | $                          | 27,692                  |                       | $ | 108,691  |   | $ | 55,877  |
|                                                                                         |                         |                         |                       |                         |                       |                         |                       |   |
| Weighted average outstanding units (denominator)                         |                         |                         |                       |                         |                       |                         |                       |
|                                                                                         | Class A                 | 735,385                 |                       | 735,385                 |                       | 735,385                 |                       | 735,385  |
|                                                                                         | Class B                 | 755,385                 |                       | 735,385                 |                       | 755,385                 |                       | 735,385  |
|                                                                                         |                         |                         |                       |                         |                       |                         |                       |   |
| Per unit amount                                                                    |                         |                         |                       |                         |                       |                         |                       |
|                                                                                         | Class A                 | $                            | 7.07                  |                         | $                          | 12.43                   |                       | $ | 22.75  |   | $ | 25.07  |
|                                                                                         | Class B                 | $                            | 61.95                 |                         | $                          | 25.23                   |                       | $ | 121.74  |   | $ | 50.91  |
|                                                                                         |                         |                         |                       |                         |                       |                         |                       |   |
| **Diluted income per unit:**                                                  |                         |                         |                       |                         |                       |                         |                       |
| Income attributable to USPB available to                            |                         |                         |                       |                         |                       |                         |                       |
|                                                                                         | unitholders (numerator) | $                            | 51,992                |                         | $                          | 27,692                  |                       | $ | 108,691  |   | $ | 55,877  |
|                                                                                         |                         |                         |                       |                         |                       |                         |                       |   |
| Weighted average outstanding Class A units                          | 735,385                 |                         | 735,385               |                         | 735,385               |                         | 735,385               |
| Effect of dilutive securities - Class A unit options | 12,086                  |                         | 11,453                |                         | 12,086                |                         | 11,050                |
|                                                                                         | Units (denominator)     | 747,471                 |                       | 746,838                 |                       | 747,471                 |                       | 746,435  |
|                                                                                         |                         |                         |                       |                         |                       |                         |                       |   |
| Weighted average outstanding Class B units                          | 755,385                 |                         | 735,385               |                         | 755,385               |                         | 735,385               |
| Effect of dilutive securities - Class B unit options | -                       |                         | 11,453                |                         | -                     |                         | 11,050                |
|                                                                                         | Units (denominator)     | 755,385                 |                       | 746,838                 |                       | 755,385                 |                       | 746,435  |
|                                                                                         |                         |                         |                       |                         |                       |                         |                       |   |
| Per unit amount                                                                    |                         |                         |                       |                         |                       |                         |                       |
|                                                                                         | Class A                 | $                            | 6.96                  |                         | $                          | 12.24                   |                       | $ | 22.38  |   | $ | 24.70  |
|                                                                                         | Class B                 | $                            | 61.95                 |                         | $                          | 24.84                   |                       | $ | 121.74  |   | $ | 50.16  |
|                                                                                         |                         |                         |                       |                         |                       |                         |                       |   |

 

**(10)Subsequent Events**

On June 2, 2010, NBPentered into a Unit Redemption Agreement pursuant to Section 12.5 of itsLLC Agreement to redeem at agreed upon redemption prices a portion of themembership interests in NBP that are owned or controlled by its Chief ExecutiveOfficer, Timothy M. Klein.   As a result, Mr. Klein’s affiliates received $8.0million for their redeemed units, and he retained his position with NBP. 

In addition, NBP’s Credit Facility was amended and  restated on June 4, 2010.  The amendment and restatement increased the  available borrowings under NBP’s term loan to $375.0****million,increased the revolving line of credit to $250.0 million, reduced the applicablemargin of the term loan and revolving line of credit, extended the maturity dateof the term loan to June 2015 and revised the payment schedule of the term loan,among other things.  The related bank financing charges of approximately$4.1 million will be amortized over the life of the loan. 

10

 

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**Item 2. Management’s Discussion and Analysis of Financial Condition and Results ofOperations.**

The following discussion shouldbe read in conjunction with our consolidated financial statements and relatednotes and other financial information appearing elsewhere in this report.

**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-lookingstatements are typically identified by the words “believe,” “expect,”“anticipate,” “intend,” “estimate” and similar expressions.  Actual resultscould differ materially from those contemplated by these forward-lookingstatements as a result of many factors, including economic conditions generallyand in our principal markets; the availability and prices of live cattle,natural resources and commodities; food safety; livestock disease, includingthe identification of cattle with Bovine Spongiform Encephalopathy (BSE);competitive practices and consolidation in the cattle production and processingindustries; actions of domestic or foreign governments; hedging risk; changesin interest rates and foreign currency exchange rates; consumer demand andpreferences; the cost of compliance with environmental and health laws; loss ofkey customers; loss of key employees; labor relations; and consolidation amongour customers.

In light of these risks anduncertainties, there can be no assurance that the results and eventscontemplated by the forward-looking information contained in this report willin fact transpire. Readers are cautioned not to place undue reliance on theseforward-looking statements. We do not undertake any obligation to update orrevise any forward-looking statements. All subsequent written or oralforward-looking statements attributable to us or persons acting on our behalfare expressly qualified in their entirety by these factors.  See also Part II.Item 1A, *Risk Factors,* included in this report, and Part I,**Item 1A,Risk Factors in our Annual Report on Form 10-K filed with the Securities andExchange Commission for other important factors that could cause actual resultsto differ materially from those in any such forward-looking statements, andwhich should be read in conjunction with this report.

**IndustryOutlook**

Year-to-year increases in placement of cattle on feedduring the spring quarter will provide adequate fed cattle supplies going intothe fall quarter.  However, industry herd liquidation persists and from amacro perspective keeps longer term cattle supplies in a downward trend.  The lack of expansion in pork output and very modest growth in poultrywill keep per capita protein supplies in check and provide underlying supportto cattle and beef prices.  General economic conditions remain tenuous andwill continue to dominate market potential over the coming months.  Globaltrade prospects remain positive on similar global supply issues as well as thepotential for stronger economic performance.

**Recent Developments**

On June 22, 2010, the Grain Inspection and Packers andStockyards Administration published a proposed rule adding new regulationsunder the Packers and Stockyards Act.  If adopted, the new regulations couldhave a significant impact on marketing and procurement practices in the beefprocessing industry and could affect how we procure cattle for our value-addedprograms and how we process and market value-added beef products. We cannotpresently assess the full economic impact of the proposed rule on the beef processingindustry or on our operations.  

**BeefExport Markets**

Exportmarkets for U.S. beef products remain constrained since the discovery of a caseof BSE in the State of Washington in December 2003, as well as other isolatedcases.  In July 2006, Japan agreed to reopen its market to U.S. beef fromcattle aged 20 months and younger.   South Korea announced a provisionalopening of its border to U.S. beef from animals 30 months and younger inSeptember 2006, however, its border was subsequently closed in October 2007.  SouthKorea reopened its border and started inspecting U.S. beef near the end of June2008.  These constraints and uncertainties have had a negative impact on beefexport demand.  

 

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Wecannot presently assess the full economic impact of the consequences of BSE onthe U.S. beef packing industry or on our operations.  Existing or newimport restrictions or additional regulatory restrictions or disruptions indomestic and foreign consumer demand for beef could have a material adverseaffect on the Company’s revenues and net income.

**Resultsof Operations**

***Thirteen weeks ended May 29, 2010 compared to thirteen weeks ended May30, 2009***

*General.* Net income for the thirteen weeks ended May 29, 2010 was approximately $76.7million compared to approximately $44.5 million for the thirteen weeks endedMay 30, 2009, an increase of approximately $32.2 million.  Sales were higher inthe thirteen weeks ended May 29, 2010 compared to the thirteen weeks ended May30, 2009 due in part to an approximate 3.1% increase in the average volume ofcattle processed per week and increase in the average sales prices per head ofapproximately 14.8% during this reporting period.  

Total costs and expenses of approximately $1,457.5million for the thirteen weeks ended May 29, 2010 were 94.8% as a percent ofsales compared to approximately $1,266.7 million for the thirteen weeks endedMay 30, 2009, or 96.1% as a percent of sales.  An increase in the volume ofcattle processed and cost of live cattle, and a decrease in total costs as apercentage of sales resulted in increased operating income of approximately $29.1million for the thirteen week period of fiscal year 2010 as compared to thethirteen week period of fiscal year 2009.

*Net Sales*. Net sales were approximately $1,537.9 million for the thirteen weeks ended May29, 2010 compared to approximately $1,318.0 million for the thirteen weeksended May 30, 2009, an increase of approximately $219.9 million, or 16.7%.  Theincrease in net sales resulted from an approximate 3.1% increase in the averagevolume of cattle processed per week.  Also contributing to the increase insales was an increase in average sales prices per head of about 14.8% duringthe thirteen week period ended May 29, 2010 compared to the similar thirteenweek period of fiscal year 2009.

*Cost of Sales*. Cost of sales was approximately $1,429.4 million for the thirteen weeks endedMay 29, 2010 compared to approximately $1,242.3 million for the thirteen weeksended May 30, 2009, an increase of approximately $187.1 million, or 15.1%.  Theincrease resulted primarily from an approximate 3.1% increase in the number ofcattle processed, and an increase in live cattle prices of approximately14.2%.  Partially offsetting these increases was a decrease in the averagecattle weights of approximately 1.2% during the thirteen week period of fiscal year2010 as compared to the thirteen week period of fiscal year 2009.  

*Selling, General and Administrative Expenses*.  Selling, general and administrative expenses wereapproximately $14.7 million for the thirteen weeks ended May 29, 2010 comparedto approximately $12.4 million for the thirteen weeks ended May 30, 2009, an increaseof approximately $2.3 million, or 18.5%.  The increase reflects an increase inbad debt expense of approximately $1.4 million, advertising and promotionexpense of approximately $0.4 million, and an increase in salaries ofapproximately $0.3 million.  

*Depreciation and Amortization Expense*.  Depreciation and amortization expenses were approximately$13.3 million for the thirteen weeks ended May 29, 2010 compared toapproximately $11.9 million for the thirteen weeks ended May 30, 2009, anincrease of approximately $1.4 million, or 11.8%.  Depreciation expenseincreased due to assets being placed into service, primarily at our three beefplants and two case ready plants, during fiscal year 2010. 

*Operating Income*.  Operating income was approximately $80.4 million for the thirteenweeks ended May 29, 2010 compared to approximately $51.3 million for thethirteen weeks ended May 30, 2009, an increase of approximately $29.1 million,or 56.7%.  The increase in operating income for the thirteen week period endingMay 29, 2010, resulted primarily from a decrease in expenses as a percentage ofsales of approximately 1.4%, driven by improved demand characteristics for beefproducts, as compared to the thirteen week period ended May 30, 2009.  

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*Interest Expense*.  Interest expense was approximately $3.5 million for the thirteenweeks ended May 29, 2010 compared to approximately $5.9 million for thethirteen weeks ended May 30, 2009, a decrease of approximately $2.4 million, or40.7%.  The decrease in interest expense during the thirteen weeks ended May29, 2010 as compared to the thirteen week period ended May 30, 2009 was dueprimarily to the purchase and cancellation of the remaining $66.9 million of NBP’ssenior notes during the second quarter of fiscal year 2010 resulting in adecrease of approximately $3.0 million in interest expense compared to thethirteen week period ended May 30, 2009.     

*Other, net. *Other,net non-operating income was approximately $0.3 million for the thirteen weeksended May 29, 2010 compared to other net non-operating expense of approximately$0.6 million for the thirteen weeks ended May 30, 2009, an increase ofapproximately $0.9 million.

*Income Tax Expense*.  Income tax expense was approximately $0.4 million for the thirteenweeks ended May 29, 2010 compared to income tax expense of $0.4 million for thethirteen weeks ended May 30, 2009.  Income taxes for the period was primarilyrelated to NBP’s subsidiary, National Carriers, Inc. (National Carriers).  Incometax expense is recorded on income from National Carriers, which is organized asa C Corporation.  

*Net Income Attributable to Noncontrolling Interest in NBP.*  Noncontrolling interest in the net income of NBP for the thirteen weeks ended May 29, 2010 was $24.7million compared to noncontrollinginterest in the net income for the thirteenweeks ended May 30, 2009 of $16.6 million,a change of $8.1 million. The noncontrolling interest in NBP represents the minority owners’ interest in NBP’s earnings.

***Thirty-nine weeks ended May 29, 2010 compared to thirty-nine weeksended May 30, 2009***

*General.* Net income for the thirty-nine weeks ended May 29, 2010 was approximately $162.1million compared to net income of approximately $85.2 million for thethirty-nine weeks ended May 30, 2009, an increase of approximately $76.9million.  Sales were 4.4% higher in the thirty-nine week period ended May 29,2010 compared to the thirty-nine week period ended May 30, 2009 primarily duein part to an approximate 1.1% increase in the number of cattle processed, and a4.6% increase in the average sales price per head.  

Total costs and expenses of approximately $4,043.4million for the thirty-nine weeks ended May 29, 2010 were 95.8% as a percent ofsales compared to approximately $3,951.2 million for the thirty-nine weeksended May 30, 2009, or 97.7% as a percent of sales.  An increase in the volumeof cattle processed and cost of live cattle, and a decrease in total costs as apercentage of sales resulted in increased operating income of approximately $83.9million for the thirty nine weeks ended May 29, 2010 compared to the samethirty nine week period of fiscal year 2009.

*Net Sales*. Net sales were approximately $4,221.4 million for the thirty-nine weeks endedMay 29, 2010 compared to approximately $4,045.2 million for the thirty-nineweeks ended May 30, 2009, an increase of approximately $176.2 million, or4.4%.  Net sales increased primarily due to an approximate 1.1% increase in thenumber of cattle processed, and a 4.6% increase in the average sales price perhead, during the thirty-nine weeks ended May 29, 2010 as compared to the thirty-nineweeks ended May 30, 2009.

*Cost of Sales*. Cost of sales was approximately $3,962.6 million for the thirty-nine weeksended May 29, 2010 compared to approximately $3,882.6 million for thethirty-nine weeks ended May 30, 2009, an increase of approximately $80.0million, or 2.1%.  The increase in cost of sales for the thirty-nine weeksended May 29, 2010 resulted primarily from an approximate 1.1% increase in thenumber of cattle processed, and an increase of approximately 0.9% in livecattle prices as compared to the thirty-nine week period of fiscal year 2009.  

*Selling, General and Administrative Expenses*.  Selling, general and administrative expenses wereapproximately $41.5 million for the thirty-nine weeks ended May 29, 2010compared to approximately $35.3 million for the thirty-nine weeks ended May 30,2009, an increase of approximately $6.2 million, or 17.6%.  The increase forthis period is primarily due to an increase in legal fees of $2.1 million,increase in bad debt expense of approximately $1.6 million, increase inmarketing of approximately $1.1 million, increase in travel for the period ofapproximately $0.9 million, and increased consulting expenses of approximately$0.8 million.  

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*Depreciation and Amortization Expense*.  Depreciation and amortization expenses were approximately$39.3 million for the thirty-nine weeks ended May 29, 2010 compared toapproximately $33.2 million for the thirty-nine weeks ended May 30, 2009, anincrease of approximately $6.1 million, or 18.4%.  Depreciation expenseincreased due to assets being placed into service, primarily at our three beefplants and two case ready plants during fiscal year 2010.

*Operating Income*.  Operating income was approximately $178.0 million for thethirty-nine weeks ended May 29, 2010 compared to approximately $94.1 millionfor the thirty-nine weeks ended May 30, 2009, an increase of approximately $83.9million.  The increase in operating income for the thirty-nine week period endedMay 29, 2010, resulted primarily from a decrease in the expenses as apercentage of sales of approximately 2.0%, as compared to the thirty-nine weekperiod ended May 30, 2009.  

*Interest Expense*.  Interest expense was approximately $11.6 million for the thirty-nineweeks ended May 29, 2010 compared to approximately $18.3 million for thethirty-nine weeks ended May 30, 2009, a decrease of approximately $6.7 million,or 36.6%.  The decrease in interest expense during the thirty-nine weeks endedMay 30, 2009 as compared to the thirty-nine week period ended May 30, 2009 wasdue primarily to the purchase and cancellation of the remaining $66.9 millionof NBP’s senior notes during the second quarter of fiscal year 2010 resultingin a decrease of approximately $7.6 million in interest expense compared to thethirty-nine week period ended May 30, 2009.  

*Termination Fee*. The termination fee was $0.0 million in the thirty-nine weeks ended May 29, 2010 as compared to$14.6 million in the thirty-nine weeks ended May 30, 2009.  The one-timetermination fee was received in the fiscal year 2009 as a result of the terminationof the Membership Interest Purchase Agreement dated February 29, 2008, between and among USPB, NBP,JBS S.A., and the other holders of membership interests in NBP.

*Other, net.* Other, net non-operating expense was approximately $3.5 million for the thirty-nineweeks ended May 29, 2010 compared to other, net non-operating expense ofapproximately $4.4 million for the thirty-nine weeks ended May 30, 2009, adecrease of approximately $0.9 million.  

*Income Tax Expense*.  Income tax expense was approximately $0.7 million for thethirty-nine weeks ended May 29, 2010 compared to approximately $0.9 million forthe thirty-nine weeks ended May 30, 2009, a decrease of approximately $0.2million, or 22.2%.  This decrease inincome taxes was primarily related to NBP’s subsidiary, National Carriers. Income tax expense is recorded on income from National Carriers, which isorganized as a C Corporation.

*Net Income Attributable to Noncontrolling Interest in NBP.*  Noncontrolling interest in the net income of NBP for the thirty-nine weeks ended May 29, 2010 was $52.6million compared to noncontrollinginterest in the net income for the thirty-nineweeks ended May 30, 2009 of $28.3 million,a change of $24.3 million. The noncontrolling interest in NBP represents the minority owners’ interest in NBP’s earnings.

**Liquidityand Capital Resources**

As of May 29, 2010, we had net working capital ofapproximately $216.6 million, which included $28.6 million in distributionspayable and cash and cash equivalents of $24.7 million.  As of August 29, 2009,we had net working capital of approximately $163.3 million, which included $10.9million in distributions payable and cash and cash equivalents of $18.9million.  Our primary sources of liquidity are cash flows from operations andavailable borrowings under our amended and restated credit facility (CreditFacility).

As of May 29, 2010, we had $288.0 million of long-termdebt, of which $7.7 million was classified as a current liability.  As of May29, 2010, NBP’s Credit Facility consisted of a $228.8 million term loan, all ofwhich was outstanding, and a $225.0 million revolving line of credit loan,which had outstanding borrowings of $37.9 million, outstanding letters ofcredit of $26.0 million and available borrowings of $161.2 million, based onthe most restrictive financial covenant calculations.  Cash flows fromoperations and borrowings under our Credit Facility have funded our workingcapital requirements, acquisitions, capital expenditures and other generalcorporate purposes.  NBP was in compliance with all of our financial covenantsunder our Credit Facility as of May 29, 2010.  USPB was in compliance with allof the financial covenants under its Amended and Restated Credit Agreement asof May 29, 2010.

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Inaddition to outstanding borrowings under its Credit Facility, the Company hadoutstanding borrowings under industrial revenue bonds of $12.2 million, a termloan with CoBank, of which approximately $1.2 million was outstanding, a $13.0million revolving line of credit loan, which had no outstanding borrowings, andcapital leases and other obligations of $7.9 million as of May 29, 2010. Duringthe quarter ended May 29, 2010, NBP redeemed the entire outstanding borrowingsunder its senior notes in the amount of $27.1 million.

As noted within Note 10, NBP amended and restated theterms of its Credit Facility as of June 4, 2010.  See the “Amended and RestatedSenior Credit Facility” section below for additional details related to theamendment and restatement.  

NBP believes that available borrowings under its CreditFacility and cash provided by operating activities will be sufficient tosupport its working capital, capital expenditures and debt service requirementsfor the foreseeable future.  NBP’s ability to generate sufficient cash,however, is subject to certain general economic, financial, industry,legislative, regulatory and other factors beyond its control.  For a review of theobligations that affect liquidity, please see the*Cash Payment Obligations*table in Item 7. *Management’s Discussion and Analysis of Financial Conditionand Results of Operations* of our Annual Report on Form 10-K for the fiscal yearended August 29, 2009.

*OperatingActivities*

Net cash provided by operating activities in thethirty-nine weeks ended May 29, 2010 was $134.0 million compared to net cashprovided by operating activities of $143.8 million in the thirty-nine weeksended May 30, 2009.  The $9.8 million change was primarily due to net income ofapproximately $162.1 million during the thirty-nine week period ended May 29,2010 as compared to the net income of $85.2 million during the thirty-nine weekperiod ended May 30, 2009.  The increase in net income is offset by a decreasein cash provided by accounts receivable and inventory of approximately of $62.6and $53.1 million respectively.   

*InvestingActivities*

Net cash used in investing activities was $27.9million in the thirty-nine weeks ended May 29, 2010 compared to $19.8 millionin the thirty-nine weeks ended May 30, 2009.  The decrease in cash used wasprimarily the result of the $14.6 million termination fee received in thetwenty-six week period in the prior year and to a decrease in expenditures forproperty, plant and equipment related to improving operating efficiencies,primarily at our Liberal, Dodge City and Case Ready facilities, in the currentyear.

*FinancingActivities*

Net cash used in financing activities wasapproximately $100.0 million in the thirty-nine weeks ended May 29, 2010compared to net cash used in financing activities of $186.4 million in thethirty-nine weeks ended May 30, 2009.  The decrease in cash used in financingactivities was primarily attributed to an approximate $125.5 million redemptionof member capital in the prior period, and an additional $75.0 million borrowingson the term loan in the current period.  These decreases are offset by anapproximate $23.4 million increase in member and non-controlling interest distributionspaid in the current year, the purchase and cancellation of approximately $66.9million aggregate principal amount of NBP’s senior notes compared to $45.5million in the same period of the prior year, $59.0 million reduction in netreceipts under the revolving loan, and an approximate $19.6 million membercapital contribution during the prior reporting period.

*Amendedand Restated Senior Credit Facility*

Effectiveas of June 4, 2010, NBP’s Credit Facility was amended and restated to: (1)increase the borrowings under the Credit Facility by providing for a term loanfacility of up to $375 million and a revolving line of credit of up to $250million; (2) reduce the applicable margin on the rates of interest of the termloan and revolving line of credit; (3) revise the payment schedule of the termloan; (4) extend the maturity date of the Credit Facility to June 4, 2015; and (5)remove the limitations on capital expenditures; (6) add new financial covenantsregarding adjusted net worth and a fixed charge coverage ratio; and (7) add twowholly owned subsidiaries, National Beef California, LLP and National Carriers,Inc., as loan parties and guarantors.  The related financing charges, ofapproximately $4.1 million, will be amortized over the life of the loan.  

The borrowings under the Credit Facility bear interestat LIBOR or the Base Rate, plus the applicable margin.  The applicable marginfor the revolving line of credit and the term loan will be based on funded debtto EBITDA ratio with grids based on different ratios.    

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Theborrowings under the revolving loan are available for NBP’s working capital requirements,capital expenditures and other general corporate purposes.  The Credit Facilityis secured by a first priority lien on substantially all of the assets of NPBand its subsidiaries.  The principal amount outstanding under the term loan isdue and payable in equal quarterly installments, beginning in October 2010,based on a 10-year level amortization of the remaining amount of the termloan.  All outstanding loan amounts are due and payable June 4, 2015. Prepayment of the loans is allowed at any time.

The Credit Facility contains customaryaffirmative covenants relating to NBP and its subsidiaries, including, withoutlimitation, conduct of business, the maintenance of insurance, compliance withlaws, maintenance of properties, keeping of books and records, and thefurnishing of financial statements.  The facility also contains customarynegative covenants relating to NBP and its subsidiaries, including, withoutlimitation, restrictions on the following: cash distributions to its members,mergers, sale of assets, investments and acquisitions, encumbrances,indebtedness, affiliate transactions, and ERISA matters.  The ability of NBPand its subsidiaries to engage in other business, incur debt or grant liens isalso restricted.

TheCredit Facility contains customary events of default, including withoutlimitation, failure to make payment when due, materially incorrectrepresentations and warranties, breach of covenants, events of bankruptcy,default of other indebtedness that would permit acceleration of suchindebtedness, the occurrence of one or more unstayed or undischarged judgmentsin excess of $3.0 million, changes in custody or control of NBP’s property,changes in control of NBP, or failure of any of the loan documents to remain infull force, and NBP’s failure to properly fund its employee benefit plans.  TheCredit Facility also includes customary provisions protecting the lendersagainst increased cost or loss of yield resulting from changes in tax, reserve,capital adequacy and other requirements of law.

**Item3. Quantitative and Qualitative Disclosures about Market Risk.**

The principalmarket risks affecting NBP’s business are exposure to changes in prices forcommodities, such as livestock and boxed beef, and interest rate risk.

*Commodities.*NBPuses various raw materials, many of which are commodities. Raw materials aregenerally available from several different sources, and NBP presently believesthat it can obtain them as needed.  Commodities are subject to pricefluctuations that may create price risk. From time to time, NBP may hedgecommodities in order to mitigate this price risk. While this may tend to limit NBP’sability to participate in gains from commodity price fluctuations, it alsotends to reduce the risk of loss from changes in commodity prices.  To theextent the contracts are not designated as normal purchases, NBP reflectscommodity contract gains and losses as adjustments to the basis of underlyingcommodities purchased; gains or losses are recognized in the statement of operationsas a component of costs of goods sold.

NBP purchases cattle for use in its processingbusinesses. From time to time, NBP 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. From time to time, NBP enters into forward sales contracts at pricesdetermined prior to shipment. NBP may hedge the commodity price risk associatedwith these activities in order to mitigate this price risk.  While this maytend to limit NBP’s ability to participate in gains from commodity pricefluctuations, it also tends to reduce the risk of loss from changes incommodity beef prices.  To the extent the contracts are not designated asnormal sales, NBP reflects commodity contract gains and losses as adjustmentsto the basis of underlying commodities sold; gains or losses are recognized in thestatement of operations as a component of net sales. 

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From time to time, NBP purchases cattle futures andoptions contracts.  NBP’s primary use of these contracts is to partiallydetermine its future input costs when it has committed forward sales purchaseorders from customers at a specified fixed price.  The longest duration futurescontract owned is thirteen months.  In accordance with ASC Topic 815, *Accountingfor Derivative Instruments and Hedging Activities*, as amended, NBP accountsfor futures contracts and their related firm purchase commitments at fairvalue. Certain firm commitments for live cattle purchases and all firmcommitments for boxed beef sales are treated as “normal purchases and sales”and not marked to market.  ASC topic 815 imposes extensive recordkeepingrequirements in order to treat a derivative instrument as a hedge foraccounting purposes. Derivatives qualify for treatment as hedges when there isa high correlation between the change in fair value of the instrument and therelated change in fair value of the underlying commitment. For derivatives thatqualify as effective hedges, the change in fair value has no net effect onearnings until the hedged transaction affects earnings. For derivatives thatare not designated as hedging instruments, or for the ineffective portion of ahedging instrument, the change in fair value does affect current period netearnings.

While NBP management believes each of theseinstruments help mitigate various market risks, they are not designated andaccounted for as hedges as a result of the extensive recordkeeping requirementsof this statement. Accordingly, the gains and losses associated with the changein fair value of the instrument and the offsetting gains and losses associatedwith changes in the market value of certain of the firm purchase commitmentsrelated to the futures contracts are recorded to income and expense in theperiod of change.

NBP uses a sensitivity analysis to evaluate the effectthat changes in the market value of commodities will have on these commodityderivative instruments.  NBP feels that sensitivity analysis more appropriatelyreflects the potential market value exposure associated with the use ofderivative instruments.  As of May 29, 2010, the potential change in the fairvalue of applicable commodity prices, assuming a hypothetical 10% decrease inthe underlying commodity price in each year, was $1.7 million.  As of August30, 2009, the potential change in fair value of applicable commodity prices,assuming a hypothetical 10% decrease in the underlying commodity price, was$16.4 million.  This change was primarily due to the cattle futures contractsthat NBP entered into during the first quarter of fiscal year 2009 to offsetthe risk of fixed-price sales commitments.

*Foreign Operations.*  Transactions denominated in a currency other than an entity’sfunctional currency may expose that entity to currency risk.  Although NBPoperates in international markets including Japan and South Korea, productsales are predominately made in United States dollars, and therefore, currencyrisks are limited.

*Interest Rates.*As a result of the Company’s normal borrowing and leasing activities, itsoperating results are exposed to fluctuations in interest rates, which managedprimarily through its regular financing activities. The Company generallymaintains limited investments in cash and cash equivalents.  

The Company has long-term debt with variable interestrates. Short-term debt is primarily comprised of the current portion oflong-term debt maturing twelve months from the balance sheet date.  Ourvariable interest expense is sensitive to changes in the general level ofinterest rates.  As of May 29, 2010, the weighted average interest rate on our$278.9 million of variable rate debt was approximately 5.2%.

We had total interest expense of approximately $11.6million during the thirty-nine week period ending May 29, 2010.  The estimatedincrease in interest expense from a hypothetical 200 basis point increase inapplicable variable interest rates would have been approximately $4.0 millionin the thirty-nine week period ending May 29, 2010. 

**Item4.  Controls and Procedures.**

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We maintain asystem of controls and procedures designed to provide reasonable assurance asto the reliability of the Consolidated Financial Statements and otherdisclosures included in this report, as well as to safeguard assets fromunauthorized use or disposition. We evaluated the effectiveness of the designand operation of our disclosure controls and procedures as defined in theSecurities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) undersupervision and with the participation of management, including our ChiefExecutive Officer and Chief Financial Officer. Based upon that evaluation, asof the end of the period covered by this Quarterly Report on Form 10-Q, ourChief Executive Officer and Chief Financial Officer concluded that ourdisclosure controls and procedures were effective in alerting them, in a timelymanner, to material information required to be included in our periodicSecurities and Exchange Commission filings.  There have been no changes in ourinternal controls over financial reporting during the thirty-nine weeks ended May29, 2010 that have materially affected, or are reasonably likely to materiallyaffect, our internal control over financial reporting.  The design of anysystem of controls and procedures is based in part upon certain assumptionsabout the likelihood of future events. 

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**PARTII. OTHER INFORMATION**

** **

**Item 1. Legal Proceedings.**

For informationregarding legal proceedings, see Note 6. *Contingencies* to our ConsolidatedFinancial Statements included in Part I- *Item 1* of this Form 10-Q,which is incorporated herein by reference. 

**Item 1A. Risk Factors.**

The risk factors setforth in our Annual Report on Form 10-K for the fiscal year ended August 29,2009 have not materially changed.  Please refer to the Company’s report on Form10-K for the fiscal year ended August 29, 2009 to consider those risk factors.

**Item 2. UnregisteredSales of Equity Securities and Use of Proceeds.**

None.

**Item 3. Defaults UponSenior Securities.**

None. 

**Item4. Submission of Matters to a Vote of Security Holders.**

None

**Item 5. Other Information.**

USPB continues tomonitor the initial public offering market and may pursue taking National Beef,Inc. public in the future.

**Item 6. Exhibits.**
|   | (A) |   | Exhibits |
|--------|-----|--------|----------|

 
|   |   | 10.1   | Amended and Restated Credit  Agreement dated as of June 4, 2010 entered into by and between National Beef  Packing Company, LLC, certain of its subsidiaries, and various lenders  (incorporated by reference to Exhibit 10.1 (File No. 333-111407) to Form 8-K  filed with the SEC on June 8, 2010). |
|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                                                                                                                                                                                                  |
|   |   | 10.2   | Unit Redemption Agreement by and  between NATIONAL BEEF PACKING COMPANY, LLC, TKK INVESTMENTS, LLC, and TMKCo,  LLC, (incorporated herein by reference  to Exhibit 10.2 to Form 8-K (File No. 333-115164) filed with the SEC on June  8, 2010).                                                       |
|   |   |   |                                                                                                                                                                                                                                                                                                  |
|   |   | 10.3   | Fifth Amended Exhibit 3.1  to National’s Limited Liability Company Agreement (incorporated herein by reference to Exhibit 10.3  to Form 8-K (File No. 333-115164) filed with the SEC on June 8, 2010).                                                                                           |
|   |   |   |                                                                                                                                                                                                                                                                                                  |
|   |   | 31.1   | Certification of the Chief  Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002 (filed herewith).                                                                                                                                                                       |
|   |   |   |                                                                                                                                                                                                                                                                                                  |
|   |   | 31.2   | Certification of the  Principal Financial and Accounting Officer pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                                                                                    |
|   |   |   |                                                                                                                                                                                                                                                                                                  |
|   |   |   |                                                                                                                                                                                                                                                                                                  |
|   |   |   |                                                                                                                                                                                                                                                                                                  |

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|   |   |   |                                                                                                                                                                                                    |
|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | 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 (filed  herewith).                    |
|   |   |   |                                                                                                                                                                                                    |
|   |   | 32.2   | Certification of the  Principal Financial and Accounting Officer pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 (filed herewith). |
|   |   |   |                                                                                                                                                                                                    |

 

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**SIGNATURES**

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized.

 

 

                                                                                                                

 

| U.S. Premium Beef, LLC |
|------------------------|
|                   |   |   |
|                   |   |   |
| By:                    |   | /s/ Steven D. Hunt |
|                   |   |   |
|                   |   | Steven D. Hunt*Chief Executive Officer*

*(Principal Executive Officer)* |

 

|   |   |                                                                                           |
|--------|--------|------------------------------------------------------------------------------------------------|
| By:    |   | /s/ Scott J. Miller                                                                            |
|   |   |                                                                                           |
|   |   | Scott J. Miller* Chief Financial Officer*

*(Principal Financial and Accounting Officer)* |

 

 

 

Date:July 9, 2010