**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 February 23, 2008** |
| **or**                                               |

 

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

 

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

**Commissionfile number 333-115164**

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

| **DELAWARE**                                                        |   | **20-1576986**                            |
|---------------------------------------------------------------------|--------|-------------------------------------------|
| **(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 is a large accelerated filer, an accelerated filer,or a non-accelerated filer.  See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

| LargeAccelerated Filer o | Accelerated Filer o | Non-accelerated		Filer þ |
|--------------------------|---------------------|-------------------------------|

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 March 29, 2008, there were 735,385 Class A units and 735,385 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. | 10           |
|                  |                                                                                         |         |
| Item 3.               | Quantitative and Qualitative Disclosures About Market Risk.                                  | 16           |
|                  |                                                                                         |         |
| Item 4T.              | Controls and Procedures.                                                                     | 17           |
|                  |                                                                                         |         |
|                  |                                                                                         |         |
| PART II.              | OTHER INFORMATION                                                                            |         |
|                  |                                                                                         |         |
| Item 1.               | Legal Proceedings.                                                                           | 18           |
|                  |                                                                                         |         |
|    Item 1A. | Risk Factors.                                                                                | 18           |
|                  |                                                                                         |         |
| Item 2.               | Unregistered Sales of Equity Securities and Use of Proceeds.                                 | 18           |
|                  |                                                                                         |         |
| Item 3.               | Defaults Upon Senior Securities.                                                             | 18           |
|                  |                                                                                         |         |
| Item 4.               | Submission of Matters to a Vote of Security Holders.                                         | 18           |
|                  |                                                                                         |         |
| Item 5.               | Other Information.                                                                           | 18           |
|                  |                                                                                         |         |
| Item 6.               | Exhibits.                                                                               | 19           |
|                  |                                                                                         |         |
|                  | Signatures.                                                                                  | 21           |

 

 

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. 

**                                                                                               **

 

 

 

 

 

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**PART I.  FINANCIAL INFORMATION**

** **

**Item 1.  Financial Statements.**

 

 

 

 

 

 

 

 

 

 

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| ** **                                                                                                                                                  |                                                                                                                |                                                                            |          |          |                  |          |                |          |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------|---------------|-----------------------|---------------|---------------------|---------------|--------|
| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                                                                                        |
| **Consolidated Balance Sheets**                                                                                                                   |
| (in thousands, except unit information)                                                                                                 |
|                                                                                                                                                        |                                                                                                                |                                                                            |          |          |                  |          |                |
|                                                                                                                                                        |                                                                                                                |                                                                            |          |          | **February 23,** |          | **August 25,** |
| **Assets**                                                                                                                                                  |                                                                                                                | **2008**                                                                        |          | **2007**      |
|                                                                                                                                                        |                                                                                                                |                                                                            |          |          | **(unaudited)**       |          |                |
| Current assets:                                                                                                                                        |                                                                                                                |                                                                            |          |          |
|                                                                                                                                                        | Cash and cash equivalents                                                                            |                                                                            | $             | 60,654   |                  | $             | 62,869         |
|                                                                                                                                                        | Accounts receivable, less allowance for returns and doubtful accounts       |                                                                            |          |          |                  |
|                                                                                                                                                        |                                                                                                                | of $3,800 and $4,642, respectively                          |          | 169,762  |                  | 189,728  |
|                                                                                                                                                        | Due from affiliates                                                                                       |                                                                            | 5,100    |          | 4,609            |
|                                                                                                                                                        | Other receivables                                                                                              |                                                                            | 6,035    |          | 8,389            |
|                                                                                                                                                        | Inventories                                                                                                         |                                                                            | 168,776  |          | 177,244          |
|                                                                                                                                                        | Other current assets                                                                                      |                                                                            | 14,208   |          | 14,144           |
|                                                                                                                                                        |                                                                                                                | Total current assets                                                  |          | 424,535  |                  | 456,983  |
| Property, plant, and equipment, at cost                                                                                            |                                                                                                                | 397,656                                                                    |          | 372,404  |
|                                                                                                                                                        | Less accumulated depreciation                                                                             |                                                                            | (115,989)     |          | (99,575)              |
|                                                                                                                                                        |                                                                                                                | Net property, plant, and equipment                          |          | 281,667  |                  | 272,829  |
| Goodwill                                                                                                                                                    |                                                                                                                |                                                                            | 80,042   |          | 80,042           |
| Other intangible assets, net of accumulated amortization                                                                      |                                                                                                                |                                                                            |          |          |
|                                                                                                                                                        | of $8,260 and $7,214, respectively                                                              |                                                                            | 27,788   |          | 28,659           |
| Other assets                                                                                                                                           |                                                                                                                | 10,319                                                                     |          | 10,104   |
|                                                                                                                                                        |                                                                                                                | Total assets                                                               |          | $             | 824,351          |          | $                   | 848,617  |
|                                                                                                                                                        |                                                                                                                |                                                                            |          |          |                  |          |                |
| **Liabilities and Capital Shares and Equities**                                                                                    |                                                                                                                |                                                                            |          |          |
| Current liabilities:                                                                                                                                   |                                                                                                                |                                                                            |          |          |
|                                                                                                                                                        | Current installments of long-term debt                                                          |                                                                            | $             | 4,545    |                  | $             | 4,421          |
|                                                                                                                                                        | Cattle purchases payable                                                                                  |                                                                            | 62,413   |          | 62,995           |
|                                                                                                                                                        | Accounts payable - trade                                                                             |                                                                            | 59,300   |          | 60,257           |
|                                                                                                                                                        | Due to affiliates                                                                                         |                                                                            | 235      |          | 977              |
|                                                                                                                                                        | Accrued compensation and benefits                                                                    |                                                                            | 15,941   |          | 18,785           |
|                                                                                                                                                        | Accrued insurance                                                                                              |                                                                            | 10,836   |          | 14,550           |
|                                                                                                                                                        | Other accrued expenses and liabilities                                                          |                                                                            | 11,929   |          | 11,757           |
|                                                                                                                                                        | Distributions payable                                                                                          |                                                                            | 254      |          | 2,708            |
|                                                                                                                                                        |                                                                                                                | Total current liabilities                                             |          | 165,453  |                  | 176,450  |
| Long-term liabilities:                                                                                                                                 |                                                                                                                |                                                                            |          |          |
|                                                                                                                                                        | Long-term debt, excluding current installments                                                  |                                                                            | 462,968  |          | 438,544          |
|                                                                                                                                                        | Other liabilities                                                                                              |                                                                            | 2,428    |          | 2,559            |
|                                                                                                                                                        |                                                                                                                | Total long-term liabilities                                           |          | 465,396  |                  | 441,103  |
|                                                                                                                                                        |                                                                                                                | Total liabilities                                                          |          | 630,849  |                  | 617,553  |
| Minority interest in National Beef Packing Company, LLC and Kansas City Steak Company, LLC | 86,850                                                                                                         |                                                                            | 77,890   |
| Capital shares and equities:                                                                                                                 |                                                                                                                |                                                                            |          |          |
|                                                                                                                                                        | Members' capital, 735,385 Class A units and 735,385 Class B units |                                                                            |          |          |                  |
|                                                                                                                                                        |                                                                                                                | authorized, issued and outstanding                               |          | 55,947   |                  | 102,472  |
|                                                                                                                                                        | Patronage notices                                                                                              |                                                                            | 50,642   |          | 50,642           |
|                                                                                                                                                        | Accumulated other comprehensive income                                                               |                                                                            | 63       |          | 60               |
|                                                                                                                                                        |                                                                                                                | Total capital shares and equities                           |          | 106,652  |                  | 153,174  |
| Commitments and contingencies                                                                                                                     |                                                                                                                | -                                                                          |          | -        |
|                                                                                                                                                        |                                                                                                                | Total liabilities and capital shares and equities |          | $             | 824,351          |          | $                   | 848,617  |
|                                                                                                                                                        |                                                                                                                |                                                                            |          |          |                  |          |                |
| See accompanying notes to consolidated financial statements.                                                                  |                                                                                                                |                                                                            |          |          |

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| ** **                                                                                 |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |   |            |     |   |
|--------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|-----------------------------------------|-----------------------------------|-----------------|-----------------|---------------------------------|-----------------|---------------------------------|-----------------|---------------------------------|-----------------|---------------------------------|--------|-----------------|----------|--------|
| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                       |
| **Consolidated Statements of Operations**                                   |
| (in thousands, except unit and per unit data)           |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
|                                                                                       |                                                                                           |                                    |                              |            |            | **13 weeks ended**    |            | **13 weeks ended**    |            | **26 weeks ended**    |            | **26 weeks ended**    |
|                                                                                       |                                                                                           |                                    |                              |            |            | **February 23, 2008** |            | **February 24, 2007** |            | **February 23, 2008** |            | **February 24, 2007** |
|                                                                                       |                                                                                           |                                    |                              |            |            | **(unaudited)**                 |            | **(unaudited)**                 |            | **(unaudited)**                 |            | **(unaudited)**                 |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
| Net sales                                                                             |                                                                                           |                                    |                              | $               | 1,305,950  |                            | $               | 1,313,319                  |            | $                               | 2,704,052  |                            | $      | 2,586,344  |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
| Costs and expenses:                                                              |                                                                                           |                                    |                              |            |            |                            |            |                            |
|                                                                                       | Cost of sales                                                                        |                                    | 1,288,194                    |            | 1,287,543  |                            | 2,681,887  |                            | 2,557,626  |
|                                                                                       | Selling, general, and administrative expenses                              |                                    | 13,212                       |            | 10,801     |                            | 24,871     |                            | 21,235     |
|                                                                                       | Depreciation and amortization                                                        |                                    | 8,755                        |            | 7,949      |                            | 17,584     |                            | 15,817     |
|                                                                                       |                                                                                           | Total costs and expenses |                              | 1,310,161  |            | 1,306,293                  |            | 2,724,342                  |            | 2,594,678                  |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
|                                                                                       |                                                                                           |                                    | Operating (loss) income |            | (4,211)         |                            | 7,026      |                            | (20,290)        |                            | (8,334)         |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
| Other income (expense):                                                          |                                                                                           |                                    |                              |            |            |                            |            |                            |
|                                                                                       | Interest income                                                                           |                                    | 414                          |            | 537        |                            | 942        |                            | 1,094      |
|                                                                                       | Interest expense                                                                          |                                    | (9,190)                           |            | (9,807)         |                            | (18,410)        |                            | (19,156)        |
|                                                                                       | Minority owners' interest in net loss of National Beef |                                    |                              |            |            |                            |            |                            |            |
|                                                                                       |                                                                                           | Packing Company, LLC          |                              | 4,872      |            | 1,228                      |            | 16,263                     |            | 12,324                     |
|                                                                                       | Minority owners' interest in net income of Kansas City |                                    |                              |            |            |                            |            |                            |            |
|                                                                                       |                                                                                           | Steak Company, LLC            |                              | (421)           |            | (300)                           |            | (446)                           |            | (352)                           |
|                                                                                       | Equity in loss of aLF Ventures, LLC                              |                                    | (25)                              |            | (25)            |                            | (50)            |                            | (54)            |
|                                                                                       | Other, net                                                                                |                                    |                              | 1,541      |            | 382                        |            | 1,809                      |            | 671                        |
|                                                                                       |                                                                                           |                                    | Loss before taxes       |            | (7,020)         |                            | (959)           |                            | (20,182)        |                            | (13,807)        |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
| Income tax expense                                                               |                                                                                           | (530)                                   |                              | (657)           |            | (1,080)                         |            | (885)                           |
|                                                                                       |                                                                                           |                                    | Net loss                     |            | $               | (7,550)                         |            | $                               | (1,616)         |                            | $               | (21,262)                        |   | $               | (14,692) |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
| Loss per linked unit:                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |
|                                                                                       | Basic                                                                                          |                                    |                              |            | $               | (10.27)                         |            | $                               | (2.20)          |                            | $               | (28.91)                         |   | $               | (19.98)  |
|                                                                                       | Diluted                                                                                        |                                    |                              |            | $               | (10.27)                         |            | $                               | (2.20)          |                            | $               | (28.91)                         |   | $               | (19.98)  |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
| Outstanding weighted-average Class A and Class B units: |                                                                                           |                                    |                              |            |            |                            |            |                            |
|                                                                                       | Basic                                                                                          |                                    |                              |            | 735,385    |                            | 735,505    |                            | 735,385    |                            | 735,505    |
|                                                                                       | Diluted                                                                                        |                                    |                              |            | 735,385    |                            | 735,505    |                            | 735,385    |                            | 735,505    |
|                                                                                       |                                                                                           |                                    |                              |            |            |                            |            |                            |            |                            |            |                            |
| See accompanying notes to consolidated financial statements. |                                                                                           |                                    |                              |            |            |                            |            |

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| ** **                                                                                   |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |         |         |                            |         |                            |   |   |
|----------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|------------------------------------------------------------|----------------------------------------------------------------------------------------|--------------|--------------|---------------------------------|--------------|---------------------------------|--------|--------|
| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                         |
| **Consolidated Statements of Cash Flows**	(in thousands)            |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |         |         |                            |         |                            |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |         |         | **26 weeks ended**    |         | **26 weeks ended**    |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |         |         | **February 23, 2008** |         | **February 24, 2007** |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |         |         | **(unaudited)**                 |         | **(unaudited)**                 |
| Cash flows from operating activities:                                    |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |
|                                                                                         | Net loss                                                                                                                                              |                                                                                              |                                                       |                                                                                   | $            | (21,262)     |                            | $            | (14,692)                        |
|                                                                                         | Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                                                              |                                                       |
|                                                                                         |                                                                                                                                                       | Depreciation and amortization                                                           |                                                       | 17,584                                                                            |         | 15,817  |
|                                                                                         |                                                                                                                                                       | Loss (gain) on disposal of property, plant, and equipment |                                                       | 13                                                                                |         | (5)          |
|                                                                                         |                                                                                                                                                       | Gain (loss) on disposal of investment                                    |                                                       | (1,342)                                                                                |         | -       |
|                                                                                         |                                                                                                                                                       | Minority interest                                                                            |                                                       | (15,945)                                                                               |         | (12,111)     |
|                                                                                         |                                                                                                                                                       | Changes in assets and liabilities:                                            |                                                       |                                                                                   |         |         |
|                                                                                         |                                                                                                                                                       |                                                                                              | Accounts receivable                                   |                                                                                   | 19,966  |         | (5,229)                         |
|                                                                                         |                                                                                                                                                       |                                                                                              | Due from affiliates                              |                                                                                   | (491)        |         | 82                         |
|                                                                                         |                                                                                                                                                       |                                                                                              | Other receivables                                     |                                                                                   | 2,354   |         | (2,460)                         |
|                                                                                         |                                                                                                                                                       |                                                                                              | Inventories                                                |                                                                                   | 8,468   |         | (5,023)                         |
|                                                                                         |                                                                                                                                                       |                                                                                              | Other assets                                          |                                                                                   | (454)        |         | (905)                           |
|                                                                                         |                                                                                                                                                       |                                                                                              | Cattle purchases payable                         |                                                                                   | 3,232   |         | 3,920                      |
|                                                                                         |                                                                                                                                                       |                                                                                              | Accounts payable                                      |                                                                                   | 8,064   |         | (2,461)                         |
|                                                                                         |                                                                                                                                                       |                                                                                              | Due to affiliates                                |                                                                                   | (742)        |         | (450)                           |
|                                                                                         |                                                                                                                                                       |                                                                                              | Accrued compensation and benefits           |                                                                                   | (2,844)      |         | (13,642)                        |
|                                                                                         |                                                                                                                                                       |                                                                                              | Accrued insurance                                     |                                                                                   | (3,714)      |         | (3,481)                         |
|                                                                                         |                                                                                                                                                       |                                                                                              | Other accrued expenses and liabilities |                                                                                   | 507     |         | (1,855)                         |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       | Net cash provided by (used in) operating activities |         | 13,394  |                            | (42,495)     |
| Cash flows from investing activities:                                    |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |
|                                                                                         | Capital expenditures, including interest capitalized                                                                                   |                                                                                              | (25,510)                                                   |                                                                                   | (21,243)     |
|                                                                                         | Acquisition of business, final purchase price adjustment                                                                     |                                                                                              | -                                                     |                                                                                   | 1,248   |
|                                                                                         | Proceeds from sale of property, plant and equipment                                                                     |                                                                                              | 121                                                   |                                                                                   | 137     |
|                                                                                         | Proceeds from redemption of investment                                                                                                 |                                                                                              | 1,342                                                 |                                                                                   | -       |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       | Net cash used in investing activities                         |         | (24,047)     |                            | (19,858)     |
| Cash flows from financing activities:                                    |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |
|                                                                                         | Net receipts under revolving credit lines                                                                                         |                                                                                              | 26,761                                                |                                                                                   | 71,022  |
|                                                                                         | Repayments of other indebtedness / capital leases                                                                            |                                                                                              | (1,698)                                                    |                                                                                   | (1,156)      |
|                                                                                         | Payments of notes payable and fees                                                                                                |                                                                                              | (515)                                                      |                                                                                   | (7,899)      |
|                                                                                         | Change in overdraft balances                                                                                                                |                                                                                              | (12,835)                                                   |                                                                                   | 5,274   |
|                                                                                         | Distributions to minority interest owners in National Beef Packing Company, LLC                          |                                                                                              | (3,278)                                                    |                                                                                   | (5,451)      |
|                                                                                         | Member distributions                                                                                                                                  |                                                                                              | -                                                     |                                                                                   | (861)        |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       | Net cash provided by financing activities                     |         | 8,435   |                            | 60,929  |
| Effect of exchange rate changes on cash                        |                                                                                                                                                       | 3                                                                                            |                                                       | 7                                                                                 |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       | Net decrease in cash                                                    |         | (2,215)      |                            | (1,417)      |
| Cash and cash equivalents at beginning of the period |                                                                                                                                                       | 62,869                                                                                       |                                                       | 58,434                                                                            |
| Cash and cash equivalents at end of the period       |                                                                                                                                                       | $                                                                                                 | 60,654                                                |                                                                                   | $            | 57,017  |
| Supplemental cash disclosures:                                                     |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |
|                                                                                         | Cash paid during the period for interest                                                                                     |                                                                                              | $                                                          | 18,852                                                                            |         | $            | 20,591                     |
|                                                                                         | Cash paid during the period for taxes, net of refunds                                                         |                                                                                              | $                                                          | 979                                                                               |         | $            | 690                        |
|                                                                                         |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |         |         |                            |         |                            |
| See accompanying notes to consolidated financial statements.   |                                                                                                                                                       |                                                                                              |                                                       |                                                                                   |

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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 25, 2007.  The results of operations for theinterim periods presented are not necessarily indicative of the results for afull fiscal year.  

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

**(2)New Accounting Pronouncements**

In September 2006, the FASB issued Statement ofFinancial Accounting Standard No. 157 (SFAS 157), *Fair Value Measurements*. This statement establishes a single authoritative definition of fair value,sets out a framework for measuring fair value, and requires additionaldisclosures about fair value measurements.  SFAS 157 will apply to fiscal yearsbeginning after November 15, 2007, and interim periods within those fiscalyears.  In February 2008, however, the FASB issued FASB Staff Position 157-2(FSP 157-2) which defers the effective date of SFAS 157 for nonfinancial assetsand nonfinancial liabilities, except for items that are recognized or disclosedat fair value in an entity’s financial statements on a recurring basis (atleast annually).  FSP 157-2 will apply to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years.  The Company is currently evaluating the impact SFAS157 may have, if any, on its Consolidated Financial Statements.

In February 2007, the FASB issued Statement ofFinancial Accounting Standard No. 159 (SFAS 159), *The Fair Value Option forFinancial Assets and Financial Liabilities*.  This statement providescompanies with an option to report selected financial assets and liabilities atfair value.  SFAS 159 will apply to fiscal years beginning after November 15, 2007.  The Company is currently evaluating the impact SFAS 159 may have, ifany, on its Consolidated Financial Statements.

In December 2007, the FASB issued Statement ofFinancial Accounting Standard No. 160 (SFAS 160),*Noncontrolling Interestsin Consolidated Financial Statements**—an amendmentof ARB No. 51*. SFAS 160 establishesaccounting and reporting standards for the noncontrolling interest (minorityinterest) in a subsidiary.  SFAS 160 requires noncontrolling interestsheld by parties other than the parent in subsidiaries be clearly identified,labeled, and presented in the consolidated balance sheet within equity, butseparate from the parent's equity.   SFAS 160 is effective for fiscalyears beginning after December 15, 2008.  The Company is currentlyassessing the impact of SFAS 160 on its Consolidated Financial Statements.

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In December 2007, the FASB issued Statement ofFinancial Accounting Standard No. 141R (SFAS 141R), *Business Combinations. *Thisstatement requires an acquirer to recognize the assets acquired, theliabilities assumed, and any noncontrolling interest in the acquiree at theacquisition date to be measured at their fair value as of that date.  Anacquirer is required to recognize assets or liabilities arising from all othercontingencies (contractual contingencies) as of the acquisition date, measuredat their acquisition-date fair values, only if it is more likely than not thatthey meet the definition of an asset or a liability in FASB Concepts StatementNo. 6, *Elements of Financial Statements.*  Any acquisition-related costsare to be expensed instead of capitalized.  The impact to the Company from theadoption of SFAS 141R in fiscal year 2009 will depend on acquisitions at thetime.  This statement applies prospectively to business combinations for whichthe acquisition date is on or after the beginning of the first annual reportingperiod beginning on or after December 15, 2008.

**(3)Inventories**

Inventories at February 23, 2008 and August 25, 2007 consisted of the following (in thousands):

| ** **                                          |                   |         |          |                            |   |                          |          |   |
|-----------------------------------------------------|------------------------|--------------|---------------|---------------------------------|--------|-------------------------------|---------------|--------|
|                                                |                   |         |          | **February 23, 2008** |   | **August 25, 2007** |
|                                                |                   |         |          |                            |   |                          |
| Dressed and boxed meat products |                   | $            | 135,180  |                            | $      | 144,766                  |
| Beef by-products                               |                   | 17,348  |          | 19,540                     |
| Supplies                                            |                   | 16,248  |          | 12,938                     |
|                                                | Total inventories |         | $             | 168,776                    |   | $                             | 177,244  |
|                                                |                   |         |          |                            |   |                          |

** **

**(4)Comprehensive Loss**

Comprehensive loss, which consists of net loss andforeign currency translation adjustments, was as follows for the periodsindicated (in thousands): 

|                                                    |   |                    |   |   |    |                                                          |    |                                                          |   |                                                          |     |                                                          |   |     |   |   |
|---------------------------------------------------------|--------|-------------------------|--------|--------|---------|---------------------------------------------------------------|---------|---------------------------------------------------------------|--------|---------------------------------------------------------------|----------|---------------------------------------------------------------|--------|----------|--------|--------|
|                                                    |   |                    |   |   |    | **13 weeks ended**

**February 23, 2008** |    | **13 weeks ended**

**February 24, 2007** |   | **26 weeks ended**

**February 23, 2008** |     | **26 weeks ended**

**February 24, 2007** |
| Net loss                                           |   |                    |   | $      | (7,550) |                                                          | $       | (1,616)                                                       |   | $                                                             | (21,262) |                                                          | $      | (14,692) |
| Other comprehensive income:                   |   |                    |   |   |    |                                                          |    |                                                          |
| Foreign currency translation adjustments | (2)    |                    | (1)    |   | 3  |                                                          | 7  |
|                                                    |   | Comprehensive loss |   | $      | (7,552) |                                                          | $       | (1,617)                                                       |   | $                                                             | (21,259) |                                                          | $      | (14,685) |
|                                                    |   |                    |   |   |    |                                                          |    |                                                          |   |                                                          |     |                                                          |

** **

**(5)Minority Interest **

At any time after certain dates, the earliest beingJuly 31, 2008, the latest being July 31, 2011, certain members of NBP managementand/or NBPCo Holdings, LLC have the right to request that NBP repurchase theirinterests, the value of which is to be determined by a mutually agreedappraisal process. If NBP is unable to effect the repurchase within a specifiedtime, the requesting member(s) have the right to cause a sale process tocommence.  The Company accounts for changes in the redemption value of theseinterests by accreting the change in value over the current period through theearliest redemption date of the respective interests.  At February 23, 2008, the minority interest in National Beef was revalued by an independent appraisalprocess, and the value was determined to be $178.2 million, which was in excessof its carrying value.  Accordingly, the carrying value of the minorityinterest in National Beef increased by approximately $25.5 million throughaccretion during the thirteen weeks ended February 23, 2008, resulting in a carrying value of $85.6 million, which is included in the accompanyingConsolidated Balance Sheet as of February 23, 2008.

The redemption value of the minority interest in NBPat February 23, 2008, increased by approximately $106.1 million compared to thevalue at August 24, 2007 primarily as a result of the Membership InterestPurchase Agreement (the Agreement) that was entered into on February 29, 2008 with JBS S.A. (JBS).  Under the Agreement, JBS will acquire all of theoutstanding membership interests in NBP for an aggregate value of $560.0million.  Generally accepted accounting principles require that the fair valueof the Company’s minority interests in NBP that are redeemable be determined atthe end of each reporting period.  This change in fair value is accreted overthe redemption period as discussed above.  Offsetting the change in the redemptionvalue of the minority interest is a corresponding change in members’ capital. See Note 9 – *Subsequent Event* for more information related to theAgreement.

 

 

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** **

**(6)Income Taxes**

On August 26, 2007, the Company adopted FASB Interpretation No. 48 (FIN 48),*Accounting for Uncertainty in Income Taxes*.  FIN 48 provides guidance on the financial statementrecognition and measurement of a tax position taken or expected to be taken ina tax return.  FIN 48 also provides guidance on derecognition, classifications,interest and penalties, accounting in interim periods, disclosures andtransition.  As a result of the adoption,tax reserves in the amount of approximately $0.5 million were reversed duringthe first quarter of fiscal year 2008. 

Priorto the adoption of FIN 48, the Company did not recognize accrued interest orpenalties on uncertain tax positions.  Shouldthe Company be required to accrue interest and penalties in the future, it willlikely record the interest accrual to interest expense and record the penaltiesaccrual to selling, general and administrative expense.  As of August 26, 2007, the Company did not have anyamounts recorded for accrued interest and penalties on uncertain taxpositions.   

The Company’s subsidiary, National Carriers, Inc.(NCI), has concluded an examination of its U.S. federal incometaxes for fiscal year 2005.  Based on federal income tax statute oflimitations, NCI remains subject to examination of its income taxes for fiscalyears 2006 and 2007. USPB does not currentlyhave any ongoing income tax examinations with the Internal Revenue Service orother tax authorities. 

**(7)Legal Proceedings**

*Schumacher v. Tyson Foods, et al.* On July 1, 2002, a lawsuit was filed against FarmlandNational Beef Packing Company, L.P. (FNBPC or the predecessor to NBP), ConAgraBeef Company, Tyson Foods, Inc. and Excel Corporation in the United StatesDistrict Court for the District of South Dakota seeking certification of aclass of all persons who sold cattle to the defendants for cash, or on a basisaffected by the cash price for cattle, during the period from April 2, 2001through May 11, 2001 and for some period up to two weeks thereafter. The casewas filed by three named plaintiffs on behalf of a putative nationwide classthat plaintiffs estimate is comprised of hundreds or thousands of members. Thecomplaint alleged that the defendants, in violation of the Packers andStockyards Act of 1921, knowingly used, without correction or disclosure,incorrect and misleading boxed beef price information generated by the USDA topurchase cattle offered for sale by the plaintiffs at a price substantially lowerthan was justified by the actual and correct price of boxed beef during thisperiod. Plaintiffs also sought recovery against all defendants under a theoryof unjust enrichment. The case was certified as a class-action matter in Juneof 2004. The plaintiffs claimed damages against FNBPC in the amount ofapproximately $4.5 million plus prejudgment interest, attorneys' fees and courtcosts. The claim is subject to reduction in an unknown amount by the number ofclass members who have opted out of the class. Trial began March 31, 2006. On April 13, 2006, the jury returned a verdict in favor of FNBPC but against theother defendants. The other defendants have filed an appeal in the UnitedStates Court of Appeals for the Eighth Circuit. The plaintiffs did not appealthe verdict for the Company but no final judgment will be entered until afterthe appeal is decided.  The Eighth Circuit reversed the judgment againstthe other defendants and the District Court has dismissed plaintiffs’ complaintwith prejudice.  The deadline for filing a petition for certiorari in theSupreme Court is April 29, 2008.  

The Company’s wholly owned subsidiary, NCI,has various independent contractor drivers who are involved in accidents fromtime to time.  Management believes the ultimate resolution of such mattersshould not have a material adverse effect on the Company’s financial condition,results of operations, or liquidity.

The Company is also a party to a numberof other lawsuits and claims arising out of the operation of its business.  Managementbelieves the ultimate resolution of such matters should not have a materialadverse effect on the Company’s financial condition, results of operations, orliquidity.

**(8)Earnings Per Unit**

Basic earnings perunit (EPU) excludes dilution and is computed by dividing income or loss availableto unitholders by the weighted-average number of linked Class A and Class Bunits outstanding for the period.  Class A units and Class B units shall beissued, redeemed, and transferred together on a one for one basis until the Boardof Directors determines the extent and conditions under which Class A units andClass B units may be issued, redeemed, and transferred separately.

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Diluted EPU reflects the potential dilution that couldoccur if potential unit purchase rights were exercised or contractualappreciation rights were converted into units.   Upon 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 Aand Class B units, or upon agreement of the CEO and the Board of Directors, theCEO may convert the contractual unit appreciation rights to up to 20,000 ClassA and Class B units.  The diluted EPU reflects the circumstances of terminationof the CEO employment agreement, and the election of CEO or agreement by theBoard of the Company and the CEO for the CEO to purchase or convert contractualrights to the maximum 20,000 units at $55 per linked Class A and Class B unitfor the periods as provided for in the CEO employment agreement. 

The diluted loss per linked unit calculation in thefollowing table excludes the effect of the 20,000 unit purchase rights notedabove for the thirteen week and twenty-six week periods ending February 23,2008 and February 24, 2007, as the effect of including them would have beenanti-dilutive to the loss per linked unit calculation. 

| * *                                                                         |   |                                                          |    |                                                          |   |                                                          |   |                                                          |     |   |   |     |
|----------------------------------------------------------------------------------|--------|---------------------------------------------------------------|---------|---------------------------------------------------------------|--------|---------------------------------------------------------------|--------|---------------------------------------------------------------|----------|--------|--------|----------|
| **Loss Per Linked Unit Calculation**                         |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
|                                                                             |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
| (In thousands, except unit and per unit data) |   | **13 weeks ended**

**February 23, 2008** |    | **13 weeks ended**

**February 24, 2007** |   | **26 weeks ended**

**February 23, 2008** |   | **26 weeks ended**

**February 24, 2007** |
|                                                                             |   | (unaudited)                                                   |    | (unaudited)                                                   |   | (unaudited)                                                   |   | (unaudited)                                                   |
| **Basic loss per unit**                                           |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
| Loss available to unitholders (numerator)                    |   | $                                                             | (7,550) |                                                          | $      | (1,616)                                                       |   | $                                                             | (21,262) |   | $      | (14,692) |
|                                                                             |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
| Weighted average outstanding units (denominator)             |   | 735,385                                                  |    | 735,505                                                  |   | 735,385                                                  |   | 735,505                                                  |
|                                                                             |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
|    Per unit amount                                           |   | $                                                             | (10.27) |                                                          | $      | (2.20)                                                        |   | $                                                             | (28.91)  |   | $      | (19.98)  |
|                                                                             |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
| **Diluted loss per unit**                                         |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
| Loss available to unitholders (numerator)                    |   | $                                                             | (7,550) |                                                          | $      | (1,616)                                                       |   | $                                                             | (21,262) |   | $      | (14,692) |
|                                                                             |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
| Weighted average outstanding units                                |   | 735,385                                                  |    | 735,505                                                  |   | 735,385                                                  |   | 735,505                                                  |
| Effect of dilutive securities - unit options       |   | -                                                        |    | -                                                        |   | -                                                        |   | -                                                        |
|    Units (demoninator)                                            |   | 735,385                                                  |    | 735,505                                                  |   | 735,385                                                  |   | 735,505                                                  |
|                                                                             |   |                                                          |    |                                                          |   |                                                          |   |                                                          |
|    Per unit amount                                           |   | $                                                             | (10.27) |                                                          | $      | (2.20)                                                        |   | $                                                             | (28.91)  |   | $      | (19.98)  |
|                                                                             |   |                                                          |    |                                                          |   |                                                          |   |                                                          |

** **

**(9)Subsequent Event**

On February 29, 2008, JBS, NBP, USPB and the other holders of membership interests in NBP, including NBPCO Holdings, LLC and parties controlled by three executive officers, John R. Miller, Timothy M. Klein and Scott H. Smith, entered into the Agreement. Under the Agreement, JBS will acquire all of the outstanding membership interests in NBP (including the membership interests issuable pursuant to deferred equity incentive compensation agreements with NBP’s Chief Executive Officer and Chief Operating Officer) for a combination of approximately $465.0 million cash and $95.0 million in common stock of JBS (the Purchase Price).

Pursuant to the Agreement, at closing USPB and certain other members of NBP will receive their proportionate share of the Purchase Price with 80.0% to be paid in cash and 20.0% to be paid in shares of common stock of JBS (the JBS Stock), which will be freely transferable on the Novo Mercado segment of the BOVESPA stock exchange in Brazil. The number of shares of JBS Stock will be determined based on the volume weighted average of the closing per share price of the JBS Stock on the BOVESPA stock exchange during the 20 trading days prior to closing, subject to certain adjustments. Certain of NBP’s members have elected to receive or, under certain circumstances, have the right to receive their portion of the Purchase Price entirely in cash. If JBS is unable to deliver JBS Stock on an unencumbered and freely transferable basis at closing, the sellers entitled to receive the JBS Stock may still demand to close, but be paid their proportionate share of the Purchase Price entirely in cash.

Consummation of the Agreement is subject to customaryconditions, including approval of the Agreement by the members of USPB and theshareholders of JBS and the expiration or termination of the applicable waitingperiods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 andpossible approvals by certain foreign jurisdictions.  On March 14, 2008, at a Special Meeting of Members, USPB’s members approved the Agreement and thetransactions contemplated under the Agreement.  The shareholders of JBS are tovote on the Agreement no later than April 11, 2008.

 

 

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The Agreement contains certain termination rights andprovides that under certain circumstances, JBS or NBP may be required to pay NBPor JBS, respectively, a termination fee of $25 million plus certain costs.  Theparties have agreed on the payment of certain fees and expenses, includingthose related to antitrust filings and compliance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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**Item2.  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-looking statementsare typically identified by the words “believe,” “expect,” “anticipate,”“intend,” “estimate” and similar expressions. Actual results could differmaterially from those contemplated by these forward-looking statements as aresult of many factors, including the satisfaction of all conditions to closethe transaction with JBS S.A. (JBS) described below under *RecentDevelopments*, economic conditions generally and in our principal markets,the availability and prices of live cattle and commodities, food safety,livestock disease, including the identification of cattle with BovineSpongiform Encephalopathy (BSE), competitive practices and consolidation in thecattle production and processing industries, actions of domestic or foreigngovernments, hedging risk, changes in interest rates and foreign currencyexchange rates, consumer demand and preferences, the cost of compliance withenvironmental and health laws, loss of key customers, loss of key employees, laborrelations, consolidation among our customers and the potential inability toreceive the anticipated benefits from the acquisition of the processingfacility in Brawley, CA.  

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 the *RiskFactors* in *Item 1A. Business* of the Company’s Annual Report forthe year ended August 25, 2007 on Form 10-K and the *Risk Factors* sectionof the Proxy Statement, which were filed with the Securities and ExchangeCommission on November 14, 2007 and March 4, 2008, respectively, for otherimportant factors that could cause actual results to differ materially fromthose in any such forward-looking statements, and which should be read inconjunction with this report.

**Industry Outlook**

The cattle herd in the United States remains in a no-growth phase.  The increased cost of production anduncertainty about future costs has led to a lack of growth in the beef cattlesegment.  Although the dairy cattle segment is also challenged by rapidly increasingcosts, the dairy herd continues to grow due to its ability to pass throughhigher production costs.  The cattle on feed supplies are nearly 2.0% above theprior year supplies and should remain above prior year levels into the earlysummer before contracting for the remainder of the summer and early fall.

**BeefExport Markets**

Export markets for U.S. beef products remain significantly constrained since the discovery of a case of BSE inthe State of Washington in December 2003, as well as other isolated cases.  InJuly 2006, Japan agreed to reopen its market to U.S. beef from cattle aged 20months and younger.  South Korea announced a provisional opening of its borderto U.S. beef from animals 30 months and younger in September 2006, however, itsborder was subsequently closed on October 5, 2007 and has not reopened.  These constraints and uncertainties have had a negative impact on beef margins.

We cannot presently assess the full economic impact ofthe consequences of BSE on the U.S. beef packing industry or on itsoperations.  Existing or new import restrictions or additional regulatoryrestrictions or disruptions in domestic consumer demand for beef may continueto have a material adverse affect on our revenues and net income.

 

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**RecentDevelopments**

*Production Cutbacks:*  On December 12, 2007, NBP announced productioncutbacks to 32-36 hours at its beef processing facilities in Liberal and Dodge City,   Kansas.  Production cuts began that week and have reduced slaughter byapproximately 10,000 to 15,000 head per week.  Management’s decision toregulate production hours is driven by market conditions.

*Membership Interest Purchase Agreement with JBS:*On February 29, 2008, JBS, NBP, USPB and the other holders of membership interests in NBP, including NBPCO Holdings, LLC and parties controlled by three executive officers, John R. Miller, Timothy M. Klein and Scott H. Smith, entered into a Membership Interest Purchase Agreement (the Agreement). Under the Agreement, JBS will acquire all of the outstanding membership interests in NBP (including the membership interests issuable pursuant to deferred equity incentive compensation agreements with NBP’s Chief Executive Officer and Chief Operating Officer) for a combination of approximately $465.0 million cash and $95.0 million in common stock of JBS (the Purchase Price).

Pursuant to the Agreement, at closing USPB and certain other members of NBP will receive their proportionate share of the Purchase Price with 80.0% to be paid in cash and 20.0% to be paid in shares of common stock of JBS (the JBS Stock), which will be freely transferable on the Novo Mercado segment of the BOVESPA stock exchange in Brazil. The number of shares of JBS Stock will be determined based on the volume weighted average of the closing per share price of the JBS Stock on the BOVESPA stock exchange during the 20 trading days prior to closing, subject to certain adjustments. Certain of NBP’s members have elected to receive or, under certain circumstances, have the right to receive their portion of the Purchase Price entirely in cash. If JBS is unable to deliver JBS Stock on an unencumbered and freely transferable basis at closing, the sellers entitled to receive the JBS Stock may still demand to close, but be paid their proportionate share of the Purchase Price entirely in cash.

Consummation of the Agreement is subject to customary conditions, including approval of the Agreement by the members of USPB and the shareholders of JBS and the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and possible approvals by certain foreign jurisdictions.  On March 14, 2008, at a Special Meeting of Members, USPB’s members approved the Agreement and the transactions contemplated under the Agreement.  The shareholders of JBS are to vote on the Agreement no later than April 11, 2008.

The Agreement contains certain termination rights and provides that under certain circumstances, JBS or NBP may be required to pay NBP or JBS, respectively, a termination fee of $25 million plus certain costs.  The parties have agreed on the payment of certain fees and expenses, including those related to antitrust filings and compliance.

**Resultsof Operations**

***Thirteen weeks ended February 23, 2008 compared to thirteen weeks ended February 24, 2007***

*General.* Net loss for the thirteen weeks ended February 23, 2008 was $7.6 million compared to a net loss of $1.6 million for the thirteen weeks ended February 24, 2007, an increased loss of $6.0 million.  Net sales were lower in thethirteen weeks ended February 23, 2008 compared to those of the prior period primarilydue to reduced production at our beef processing plants.  The number of cattleprocessed during the current thirteen week period was 8.3% less than the sameperiod of last year.

Total costs and expenses of $1,310.2 million and $1,306.3million for the thirteen weeks ended February 23, 2008 and February 24, 2007, respectively, were 100.3% as a percent of sales for the thirteen weeks ended February 23, 2008 compared to 99.5% for the thirteen weeks ended February 24, 2007.  High cattle prices contributed to an erosion of gross margin resulting in adecrease in operating income of approximately $11.4 million.  

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*Net Sales*. Net sales were $1,306.0 million for the thirteen weeks ended February 23, 2008 compared to $1,313.3 million for the thirteen weeks ended February 24, 2007, a decrease of $7.3 million, or 0.6%.  Net sales were lower in the thirteen weeksended February 23, 2008 compared to those of the prior period primarily due toreduced production at our beef processing plants.  The number of cattleprocessed during the current thirteen week period was 8.3% less than the sameperiod of last year. 

*Cost of Sales*. Cost of sales was $1,288.2 million for the thirteen weeks ended February 23, 2008 compared to $1,287.5 million for the thirteen weeks ended February 24, 2007, an increase of $0.7 million, or 0.1%.   The increase was primarily aresult of increased live cattle prices that were approximately 4.7% higher dueto the continued tight supply of market-ready cattle and to the cattle beingheavier, at average weights 0.6% more, than the same period of last year.  Partiallyoffsetting the increase in cattle prices was a decrease in cattle processing byapproximately 8.3% for the current thirteen week period as compared to the sameperiod of fiscal year 2007.

*Selling, General, and Administrative Expenses*.  Selling, general, and administrative expenses were$13.2 million for the thirteen weeks ended February 23, 2008 compared to $10.8 million for the thirteen weeks ended February 24, 2007, an increase of $2.4 million or 22.2%.  The increase reflects an increase in legal expenseof approximately $1.2 million, which was primarily related to the proposedtransaction with JBS, an increase in payroll and related expenses ofapproximately $0.9 million, due mainly to increases in bonus and salaries, anincrease in repairs and maintenance expense of approximately $0.2 million, andan increase of approximately $0.1 million in advertising expense.

*Depreciation and Amortization Expense*.  Depreciation and amortization expenses were $8.8million for the thirteen weeks ended February 23, 2008 compared to $7.9 million for the thirteen weeks ended February 24, 2007, an increase of $0.9 million,or 11.4%.  Depreciation expense increased due to assets being placed intoservice, primarily at the Dodge City and Brawley beef plants, during fiscalyear 2007.

*Operating Loss.* Operating loss was $4.2 million for the thirteen weeks ended February 23, 2008 compared to operating income of $7.0 million for the thirteen weeksended February 24, 2007, a decrease of $11.2 million.  The decrease resulted primarilyfrom higher cattle costs during the second quarter of fiscal year 2008 ascompared to the same period of last year.  

*Interest Expense*.  Interest expense was $9.2 million for the thirteen weeks ended February 23, 2008 compared to $9.8 million for the thirteen weeks ended February 24, 2007, a decrease of $0.6 million, or 6.1%.  The decrease in interest expenseduring the thirteen weeks ended February 23, 2008 as compared to the sameperiod in fiscal year 2007 was due primarily to lower interest rates on ourvariable rate debt, a decrease of approximately 192 basis points.  Offsettingthis decrease in interest rates was an increase in the weighted average ofvariable rate debt of approximately $18.7 million at February 23, 2008 as compared to February 24, 2007.

*Minority Owners’ Interest in Net Loss of National BeefPacking Company, LLC*.  Minorityowners interest in the net loss of NBP was $4.9 million for the thirteen weeksended February 23, 2008 compared to $1.2 million for the thirteen weeks ended February 24, 2007, an increase of $3.7 million.  The increase in minority owners’ interestin the net loss of NBP was due to increased net loss at NBP, which occurredprimarily from higher cattle costs during the second quarter of fiscal year2008 as compared to the same period of last year.

*Other, net. *Other,net non-operating income was $1.5 million for the thirteen weeks ended February 23, 2008 compared to other, net non-operating income of $0.4 million for thethirteen weeks ended February 24, 2007, an increase of $1.1 million.  Theincrease in other, net non-operating income was primarily related to $1.3million in proceeds received in redemption of an investment interest in which NBP’sbasis had previously been written down to zero.

*Income Tax Expense*.  Income tax expense was $0.5 million for the thirteen weeks ended February 23, 2008 compared to $0.7 million for the thirteen weeks ended February 24, 2007.  Income tax expense is recorded on income from National Carriers, Inc., which isorganized as a Subchapter C Corporation.

***Twenty-six weeks ended February 23, 2008 compared to twenty-six weeksended February 24, 2007***

*General.* Net loss for the twenty-six weeks ended February 23, 2008 was $21.3 million compared to net loss of $14.7 million for the twenty-six weeks ended February 24, 2007, an increased loss of $6.6 million.  Net sales were higher in the twenty-sixweeks ended February 23, 2008 compared to those of the prior period primarily dueto an average increase in sales prices per head of approximately 6.5%.  Thenumber of cattle processed during the current twenty-six week period was 1.4%less than the same period of last year.

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Total costs and expenses of $2,724.3 million and $2,594.7million for the twenty-six weeks ended February 23, 2008 and February 24, 2007, respectively, were 100.8% as a percent of sales for the twenty-six weeks ended February 23, 2008 compared to 100.3% for the twenty-six weeks ended February 24, 2007.  Continued high cattle prices contributed to an erosion of the gross margin for thecurrent twenty-six week period as compared to the same period of last year.  

*Net Sales*. Net sales were $2,704.1 million for the twenty-six weeks ended February 23, 2008 compared to $2,586.3 million for the twenty-six weeks ended February 24, 2007, an increase of $117.8 million, or 4.6%.  The moderate increase in netsales resulted primarily from an average increase in sales prices per head of6.5% in the twenty-six weeks ended February 23, 2008 than the same period inthe prior year while the volume of cattle processed decreased by approximately1.4%.

*Cost of Sales*. Cost of sales was $2,681.9 million for the twenty-six weeks ended February 23, 2008 compared to $2,557.6 million for the twenty-six weeks ended February 24, 2007, an increase of $124.3 million, or 4.9%.  The increase was a result ofincreased live cattle prices that were approximately 4.8% higher due to thecontinued tight supply of market-ready cattle and to the cattle being heavier,at average weights 0.7% more, than the twenty-six week period of last year. Partially offsetting this increase was decreased cattle processing of approximately1.4% for the current twenty-six week period as compared to the same period offiscal year 2007.

*Selling, General, and Administrative Expenses*.  Selling, general, and administrative expenses were$24.9 million for the twenty-six weeks ended February 23, 2008 compared to $21.2 million for the twenty-six weeks ended February 24, 2007, an increase of $3.7 million, or 17.5%.  The increase for this period is primarily due anapproximate $1.7 million increase in legal fees, an increase in payroll andbenefit expenses of approximately $1.5 million and an increase in advertisingexpense of approximately $0.3 million.  

*Depreciation and Amortization Expense*.  Depreciation and amortization expenses were $17.6million for the twenty-six weeks ended February 23, 2008 compared to $15.8 million for the twenty-six weeks ended February 24, 2007, an increase of $1.8 million, or 11.4%.  Depreciation expense increased due to assets being placed intoservice, primarily at the Dodge City and Brawley beef plants, during fiscalyear 2007.

*Operating Loss*. Operating loss was $20.3 million for the twenty-six weeks ended February 23, 2008 compared to operating loss of $8.3 million for the twenty-six weeksended February 24, 2007, an increased loss of $12.0 million.  The increased operatingloss in the current twenty-six week period resulted primarily from highercattle prices as compared to the same period of last year.

*Interest Expense*.  Interest expense was $18.4 million for the twenty-six weeks ended February 23, 2008 compared to $19.2 million for the twenty-six weeks ended February 24, 2007, a decrease of $0.8 million, or 4.2%.  The decrease in interest expenseduring the twenty-six weeks ended February 23, 2008 as compared to the same period in fiscal year 2007 was due primarily to lower interest rates on ourvariable rate debt, a decrease of approximately 147 basis points.  Offsettingthis decrease in interest rates was an increase in the weighted average ofvariable rate debt of approximately $42.8 million at February 23, 2008 as compared to February 24, 2007.

*Minority Owners’ Interest in Net Loss of National BeefPacking Company, LLC*.  Minorityowners interest in the net loss of NBP was $16.3 million for the twenty-sixweeks ended February 23, 2008 compared to $12.3 million for the twenty-sixweeks ended February 24, 2007, an increase of $4.0 million.  The increase inminority owners’ interest in the net loss of NBP was due to increased net lossat NBP, which occurred primarily from higher cattle costs during the firsttwenty-six weeks of fiscal year 2008 as compared to the same period of lastyear.

*Other, net.* Other, net non-operating income was $1.8 million for the twenty-six weeks ended February 23, 2008 compared to other, net non-operating income of $0.7 millionfor the twenty-six weeks ended February 24, 2007, an increase of $1.1 million. The increase in other, net non-operating income was primarily related to $1.3million in proceeds received in redemption of an investment interest in which NBP’sbasis had previously been written down to zero.

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*Income Tax Expense*.  Income tax expense was $1.1 million for the twenty-six weeks ended February 23, 2008 compared to $0.9 million for the twenty-six weeks ended February 24, 2007, an increase of $0.2 million, or 22.2%.  Income tax expense is recordedon income from National Carriers, Inc., which is organized as a Subchapter CCorporation.

**Liquidity and Capital Resources**

As of February 23, 2008, we had net working capital of$259.0 million, which included $0.3 million in distributions payable, and cashand cash equivalents of $60.7 million.  Asof August 25, 2007, we had net working capital of $280.5 million, whichincluded $2.7 million in distributions payable, and cash and cash equivalentsof $62.9 million.  NBP’s primary sources of liquidity are cash flow fromoperations and available borrowings under its amended and restated creditfacility.

As of February 23, 2008, we had $467.5 million oflong-term debt, of which $4.5 million was classified as a current liability.  Asof February 23, 2008, NBP’s amended and restated credit facility consisted of a$202.6 million term loan, all of which was outstanding, and a $200.0 millionrevolving line of credit loan, which had outstanding borrowings of $65.1million, outstanding letters of credit of $60.6 million and availableborrowings of $74.3 million, based on the most restrictive financial covenantcalculations.  Cash flows from operations and borrowings under the amended andrestated credit facility have funded working capital requirements, acquisitions,capital expenditures and other general corporate purposes.  NBP was incompliance with all of the financial covenants under its amended and restatedcredit facility as of February 23, 2008.

In addition to outstanding borrowings under the amendedand restated credit facility, the Company had outstanding senior notes of $160.0million, borrowings under industrial revenue bonds of $20.7 million, a termloan with CoBank, of which approximately $3.6 million was outstanding, andcapital leases and other obligations of $15.5 million as of February 23, 2008.

NBP believes that available borrowings under itsamended and restated credit facility and cash provided by operating activitieswill be sufficient to support its working capital, capital expenditures anddebt service requirements for the foreseeable future.  NBP’s ability togenerate sufficient cash, however, is subject to certain general economic,financial, industry, legislative, regulatory and other factors beyond itscontrol.  For a review of the obligations that affect liquidity, please see the*Cash Payment Obligations* table in Item 7. *Management’s Discussion andAnalysis of Financial Condition and Results of Operations* of our AnnualReport on Form 10-K for the year ended August 25, 2007.

USPB may purchasea portion of its outstanding Class A and Class B units from time to time inaccordance with the limits imposed under the CoBank Credit Agreement.

*OperatingActivities*

Net cash provided by operating activities in the twenty-sixweeks ended February 23, 2008 was $13.4 million compared to net cash used in operatingactivities of $42.5 million in the twenty-six weeks ended February 24, 2007. The improvement was primarily due net cash being provided in operating activitiesthrough accounts receivable, inventory, and accounts payable in the currentyear while net cash was used in operating activities through accountsreceivable, inventory, accounts payable and accrued compensation and benefitsin the same comparable period of last year.

*InvestingActivities*

Net cash used in investing activities was $24.0 millionin the twenty-six weeks ended February 23, 2008 compared to $19.9 million inthe twenty-six weeks ended February 24, 2007.  This increase in cash used wasprimarily attributable to an increase in expenditures for property, plant andequipment related to improving operating efficiencies, primarily at our Liberaland Dodge City facilities, in the current year.

* *

* *

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*FinancingActivities*

Net cash provided by financing activities was $8.4million in the twenty-six weeks ended February 23, 2008 compared to $60.9 million in the twenty-six weeks ended February 24, 2007.  The change was primarilyattributed to a $44.2 million difference in revolving credit borrowings and an $18.1million change in the impact of overdraft balances which was partially offsetby $7.4 million in repayments on our term note, made in the 2007 period thatdid not recur in the 2008 period during the current twenty-six week period ascompared to the same period of last year.

*Amendedand Restated Senior Credit Facility*

Effective July 25, 2007, NBP amended and restated its existing senior credit facility with a consortium of banks.  The facility nowconsists of a $202.6 million term loan that matures in May 2016 and a $200.0million revolving line of credit loan that matures in July 2012 that is subjectto certain borrowing base limitations.  

Borrowingsunder the facility bear interest at LIBOR or the Base Rate, plus the applicablemargin.  The applicable margin for the revolving line of credit will be basedon borrowing base availability with grids greater than $150.0 million, $50.0 to$150.0 million and less than $50.0 million.  As of February 23, 2008, the interest rate for the revolving loan was approximately 4.8%.   The applicable marginfor the term loan was also revised to a grid basis with different margins forFunded Debt to EBITDA ratios greater than 3.50 to 1.00 and less than 3.50 to1.00.  As of February 23, 2008, the interest rate for the term loan was approximately5.3%.

The revolving line of credit and the term loan willhave no financial covenants unless the borrowing base availability is less than$50.0 million for five consecutive business days or less than $35.0 million onany single business day during any fiscal quarter.  If the borrowing baseavailability falls below these amounts, a fixed charge ratio of 1:15 to 1:00 must be maintained at the end of each subsequent fiscal quarter until theborrowing base availability has been greater than or equal to $50.0 million for90 consecutive days.  NBP was not subject to the fixed charge ratio test at February 23, 2008.  The advance rates under the borrowing base are 90% on eligibleaccounts and 70% on eligible inventory.

Theborrowings under the revolving loan are available for NBP’s working capitalrequirements, capital expenditures and other general corporate purposes.  Theamended and restated credit facility is secured by a first priority lien onsubstantially all of NBP’s assets.  The principal amount outstanding under theterm loan is due and payable in equal installments of approximately $3.5million on the last business day of each June and December commencing on June 30, 2011.  All outstanding amounts of the term loan are due and payable on May 30, 2016.  Prepayment is allowed at any time.

Theamended and restated credit facility contains customary affirmative covenants,including, without limitation, conduct of business, the maintenance ofinsurance, compliance with laws, maintenance of properties, keeping of booksand records, and the furnishing of financial statements.  The facility alsocontains customary negative covenants, including without limitation,restrictions on the following:  distributions, mergers, sale of assets,investments and acquisitions, encumbrances, indebtedness, affiliatetransactions, and ERISA matters.

Theamended and restated credit facility contains customary events of default,including without limitation, failure to make payment when due, materiallyincorrect representations and warranties, breach of covenants, events ofbankruptcy, default of other indebtedness that would permit acceleration ofsuch indebtedness, the occurrence of one or more unstayed or undischargedjudgments in excess of $3.0 million, changes in custody or control of NBP’s property,changes in control of NBP, the failure of any of the loan documents to remainin full force, and NBP’s failure to properly fund its employee benefit plans. The facility also includes customary provisions protecting the lenders againstincreased cost or loss of yield resulting from changes in tax, reserve, capitaladequacy and other requirements of law.

** **

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

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

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

NBP purchases cattle for use in its processingbusinesses. When appropriate, 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. When appropriate, 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 may tendto 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. NBP reflects commodity contract gains and losses asadjustments to the basis of underlying commodities sold; gains or losses arerecognized in the statement of operations as a component of net sales.

NBP may use futures contracts in order to reduceexposure associated with entering into firm commitments to purchase live cattleat prices determined prior to delivery of the cattle as well as firmcommitments to sell certain beef products at sales prices determined prior toshipment. In accordance with SFAS No. 133, *Accounting for DerivativeInstruments and Hedging Activities*, as amended, NBP accounts for futurescontracts and their related firm purchase commitments at fair value. Certainfirm commitments for live cattle purchases and all firm commitments for boxedbeef sales are treated as “normal purchases and sales” and not marked tomarket.  SFAS No. 133 imposes extensive recordkeeping requirements in order totreat a derivative instrument as a hedge for accounting purposes. Derivativesqualify for treatment as hedges when there is a high correlation between thechange in fair value of the instrument and the related change in fair value ofthe underlying commitment. For derivatives that qualify as effective hedges,the change in fair value has no net effect on earnings until the hedgedtransaction affects earnings. For derivatives that are not designated ashedging instruments, or for the ineffective portion of a hedging instrument,the change in fair value does affect current period net earnings.

While management believes each of these instrumentshelp mitigate various market risks, they are not designated and accounted foras hedges under SFAS No. 133 as a result of the extensive recordkeepingrequirements of that statement. Accordingly, the gains and losses associatedwith the change in fair value of all futures contracts and the gains and lossesassociated with changes in the market value of certain of the firm commitments notdesignated as normal purchases are recorded to income and expense in the periodof change.

NBP uses a sensitivity analysis to evaluate the effectthat changes in the market value of commodities will have on these commodityderivative instruments.  As of February 23, 2008, the potential change in fairvalue of applicable commodity prices, assuming a hypothetical 10% decrease inthe underlying commodity price, was $0.2 million.  As of August 25, 2007, the potential change in fair value of applicable commodity prices, assuming ahypothetical 10% decrease in the underlying commodity price, was $5.2 million. 

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

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

We have long-term debt with variable interest rates.Short-term debt is primarily comprised of the current portion of long-term debtmaturing twelve months from the balance sheet date.  Our variable interestexpense is sensitive to changes in the general level of interest rates. As of February 23, 2008, the weighted average interest rate on our $292.0 million of variablerate debt was approximately 5.0%.

We had total interest expense of approximately $18.4million during the twenty-six week period ending February 23, 2008.  The estimated increase in interest expense from a hypothetical 200 basis point increasein applicable variable interest rates would have been approximately $2.7million in the twenty-six week period ending February 23, 2008. 

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

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 Chief ExecutiveOfficer and Chief Reporting and Compliance Officer. Based upon that evaluation,as of the end of the period covered by this Quarterly Report on Form 10-Q, ourChief Executive Officer and Chief Reporting and Compliance Officer concludedthat our disclosure controls and procedures were effective in alerting them, ina timely manner, to material information required to be included in ourperiodic Securities and Exchange Commission filings.  There have been nochanges in our internal controls over financial reporting during the thirteenweeks ended February 23, 2008 that have materially affected, or are reasonablylikely to materially affect, our internal control over financial reporting. The design of any system of controls and procedures is based in part uponcertain assumptions about the likelihood of future events. 

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**PARTII. OTHER INFORMATION**

 

**Item 1. Legal Proceedings.**

For informationregarding legal proceedings, see Note 7. *Legal Proceedings* to our ConsolidatedFinancial Statements included in Part I- *Item 1* of this Form 10-Q. 

** **

**Item 1A. Risk Factors.**

Other than thesatisfaction of closing conditions to complete the Agreement, the risk factorsset forth in our Annual Report on Form 10-K for the fiscal year ended August 25,2007 have not materially changed.  Please refer to the Company’s report on Form10-K for the fiscal year ended August 25, 2007 to consider those risk factors.

 

**Item 2. Unregistered Sales of EquitySecurities and Use of Proceeds.**

None.

** **

**Item 3. Defaults Upon Senior Securities.**

None. 

 

**Item 4. Submission of Matters to a Vote ofSecurity Holders.**

A Special Meeting of Members of USPB was held on March 14, 2008.  January 26, 2008 was fixed as the record date for determining thosemembers of the Company entitled to vote at the Special Meeting and anyadjournments or postponements of the meeting.  Two proposals were presented formember consideration.  The first was to consider and vote upon a proposal toadopt and approve the Membership Interest Purchase Agreement, dated as of February 29, 2008, among JBS S.A. (JBS), National Beef Packing Company, LLC (NBP), and theseveral members of NBP, including the Company, and approve the transactionscontemplated.  The second proposal was to grant the persons named as proxiesdiscretionary authority to vote to adjourn the Special Meeting, if necessary,for the purpose of soliciting additional proxies to vote in favor of theapproval and adoption of the Membership Interest Purchase Agreement andapproval of the proposed transaction.

Under the Company’sCertificate of Formation, Limited Liability Company Agreement and applicable Delaware law, the affirmative vote of members holding a majority of the voting power ofeach class of units was required to approve the purchase agreement.  Themembers holding Class A units are each entitled to one vote per member, and themembers holding Class B units are each entitled to one vote per Class B unitowned by such member.  For the Class A units, out of 447 votes, 421 voted forthe first proposal and 420 voted for the second proposal.  For the Class Bunits, out of 735,305 votes, 729,715 voted for the first proposal and 727,215 votedfor the second proposal.  

** **

**Item 5. Other Information.**

None.         

 

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

 

|  2.1  |   | Membership Interest Purchase  Agreement dated February 29, 2008 between JBS S.A.; National Beef  Packing Company, LLC; U.S. Premium Beef, LLC; French Basin Land and Cattle Co., LLC; TKK Investments, LLC; S‐B Enterprises V, LLC; TMKCo, LLC;  John R. Miller; Timothy M. Klein; and NBPCO Holdings, LLC (incorporated  by reference to Exhibit 20.1 to Form 8-K (File No. 333-115164) filed with the  Commission on March 4, 2008). |
|------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  2.2  |   | First Amendment of  Membership Interest Purchase Agreement dated as of March 24, 2008, among JBS, S.A.; National Beef Packing Company, LLC; U.S. Premium Beef, LLC; French Basin    Land and Cattle Co., LLC; TKK Investments, LLC; S-B Enterprises V, LLC;  TMKCO, LLC; John R. Miller; Timothy M. Klein and NBPCO Holdings, LLC (filed  herewith).                                                                                                        |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  2.3  |   | Second Amendment of  Membership Interest Purchase Agreement dated as of April 3, 2008, among JBS,  S.A.; National Beef Packing Company, LLC; U.S. Premium Beef, LLC; French  Basin Land and Cattle Co., LLC; TKK Investments, LLC; S-B Enterprises V, LLC;  TMKCO, LLC; John R. Miller; Timothy M. Klein and NBPCO Holdings, LLC (filed  herewith).                                                                                                         |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  3.0  |   | Limited Liability Company Agreement  of U.S. Premium Beef, LLC (incorporated herein by reference to Appendix D to  the voting materials – prospectus contained in U.S. Premium Beef, Inc. Registration  Statement on Form S-4 (File No. 333-115164) filed with the SEC on August 5,  2004).                                                                                                                                                            |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   3.1 |   | Amendment to the Limited  Liability Company Agreement of U.S. Premium Beef, LLC, dated as of March 27, 2008 (filed herewith).                                                                                                                                                                                                                                                                                                                               |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.1       |   | Cattle Purchase and Sale  Agreement dated February 29, 2008 between National Beef Packing Company, LLC,  Swift & Company, and U.S. Premium Beef, LLC (incorporated by reference to Exhibit 20.1 to Form  8-K (File No. 333-115164) filed with the Commission on March 4, 2008).                                                                                                                                                                         |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2       |   | Amended and Restated Lease  Agreement dated April 11, 2006 between Joint Development Authority of Brooks,  Colquitt, Grady, Mitchell and Thomas Counties and National Beef Packing  Company, LLC (incorporated herein by reference to Exhibit 10.1 to Form 10-Q  (File No. 333-111407) filed by National Beef Packing Company, LLC with the SEC  on April 3, 2008).                                                                                         |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 20.1       |   | Proxy  Statement regarding proposed transaction sent by U.S. Premium Beef, LLC to it  members on or about March 4, 2008 (incorporated  by reference to Exhibit 20.1 to Form 8-K (File No. 333-115164) filed with the  Commission on March 4, 2008).                                                                                                                                                                                                    |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 31.1       |   | Certification of the Chief  Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002.                                                                                                                                                                                                                                                                                                                                              |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 31.2       |   | Certification of the Principal  Financial and Accounting Officer pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                           |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 32.1       |   | Certification of the Chief  Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                          |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

** **

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| 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. |
|------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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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 Reporting and Compliance Officer*

*(Principal Financial and Accounting Officer)* |

 

 

 

Date: April 4, 2008 

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