----

 **UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 10-Q**

**                   (Mark one)**

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

|                                                                                       |
|---------------------------------------------------------------------------------------|
| **       For the quarterly period  ended May 28, 2005** |
| **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  number)** |

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

  Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes x Noo

     Indicate bycheck mark whether the registrant is an accelerated filer (as defined inRule 12b-2 of the Exchange Act). Yes o Nox

                The Registrant's equityis not traded on an exchange or in any public market.  As of July 11, 2005, there were 691,845 Class A units and 691,845 Class B unitsoutstanding.     

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|              | **TABLE OF CONTENTS**                                                                    |              |
|--------------|------------------------------------------------------------------------------------------|--------------|
|         |                                                                                     |         |
| **PART I.**  | **FINANCIAL INFORMATION**                                                                | **Page No.** |
|              |                                                                                     |              |
| Item 1.      | Financial Statements.                                                                    | 1            |
|              |                                                                                |              |
| Item 2.      | Management's  Discussion and Analysis of Financial Condition 	and Results of Operations. | 12           |
|              |                                                                                |              |
| Item 3.      | Quantitative and Qualitative Disclosures About Market Risk.                              | 19           |
|              |                                                                                |              |
| Item 4.      | Controls and Procedures.                                                                 | 20           |
|              |                                                                                |              |
|              |                                                                                     |              |
| **PART II.** | **OTHER INFORMATION**                                                                    |              |
|              |                                                                                     |              |
| Item 1.      | Legal Proceedings.                                                                       | 20           |
|              |                                                                                     |              |
| Item 2.      | Unregistered Sales of Equity Securities and Use of Proceeds.                             | 20           |
|              |                                                                                     |              |
| Item 3.      | Defaults Upon Senior Securities.                                                         | 21           |
|              |                                                                                     |              |
| Item 4.      | Submission of Matters to a Vote of Security Holders.                                     | 21           |
|              |                                                                                     |              |
| Item 5.      | Other Information.                                                                       | 21           |
|              |                                                                                     |              |
| Item 6.      | Exhibits.                                        | 21           |
|              |                                                                                     |              |
|              | Signatures.                                                                              | 22           |

                               

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

**                                                                                               **

| ii |
|----|

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**PART I.  FINANCIAL INFORMATION**

** **

**Item 1.  Financial Statements**

|  |
|--|

1

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                                         |
|-------------------------------------------------------------------------------------|
| **Consolidated Balance Sheets**                                                     |
| (in thousands)                                                                      |
|                                                                                     |  |  |  |  |
|                                                                                     | **May 28,** |  | **August 28,** |
| **Assets**                                                                          | ** 2005** | ** ** | **2004** |
|                                                                                     | ** (unaudited)** |  |  |
| Current  assets:                                                                    |  |  |  |  |
| Cash and cash equivalents                                                           | $ |               42,763  |  |               43,611  |
| Accounts receivable, less allowance for returns and  doubtful                       |  |  |  |  |
| accounts of $6,393 and $5,614 in 2005 and 2004,  respectively                       |  |             177,442  |  |             177,614  |
| Due from affiliates                                                                 |  |                 2,704  |  |                 2,873  |
| Other receivables                                                                   |  |                 3,197  |  |                 4,513  |
| Inventory                                                                           |  |               96,769  |  |               85,962  |
| Other current assets                                                                |  |                 8,810  |  |               10,782  |
| Total current assets                                                                |  |             331,685  |  |             325,355  |
| Property,  plant and equipment, at cost                                             |  |             255,093  |  |             242,903  |
| Less accumulated depreciation                                                       |  |             (37,243) |  |             (20,844) |
| Net property, plant and equipment                                                   |  |             217,850  |  |             222,059  |
| Goodwill                                                                            |  |               78,858  |  |               78,858  |
| Other  intangible assets, net of accumulated amortization                           |  |  |  |  |
| of $2,931 and $1,722 in 2005 and 2004, respectively                                 |  |               28,830  |  |               30,039  |
| Other  assets                                                                       |  |                 6,541  |  |                 7,446  |
| Total assets                                                                        | $ |             663,764  |  |             663,757  |
| **Liabilities and Capital Shares and  Equities**                                    | ** ** | ** ** | ** ** | ** ** |
| Current  liabilities:                                                               |  |  |  |  |
| Current installments of long-term debt                                              | $ |                 1,030  |  |               10,483  |
| Cattle purchases payable                                                            |  |               56,897  |  |               49,569  |
| Accounts payable                                                                    |  |               40,291  |  |               39,455  |
| Due to affiliates                                                                   |  |                    456  |  |                    416  |
| Patronage refunds payable in cash                                                   |  |                        -  |  |                    847  |
| Accrued compensation and benefits                                                   |  |               19,184  |  |               20,828  |
| Accrued insurance                                                                   |  |               14,569  |  |               13,903  |
| Other accrued expenses and liabilities                                              |  |               15,407  |  |                 7,690  |
| Distributions payable                                                               |  |                    412  |  |                 2,296  |
| Total current liabilities                                                           |  |             148,246  |  |             145,487  |
| Long-term  liabilities:                                                             |  |  |  |  |
| Long-term debt, excluding current maturities                                        |  |             331,521  |  |             331,812  |
| Interest rate exchange agreement                                                    |  |                        -  |  |                    105  |
| Other liabilities                                                                   |  |                 4,873  |  |                 5,237  |
| Total long-term liabilities                                                         |  |             336,394  |  |             337,154  |
| Total liabilities                                                                   |  |             484,640  |  |             482,641  |
| Minority  interest in National Beef Packing Company, LLC and Kansas City Steak, LLC |  |               63,075  |  |               63,108  |
| Capital  shares and equities:                                                       |  |  |  |  |
| Members' capital, 691,845 class A units and 691,845 class  B units                  |  |  |  |  |
| authorized, issued and outstanding                                                  |  |               65,365  |  |                       -  |
| Common stock, $0.01 par value; authorized 5,000,000  shares,                        |  |  |  |  |
| 691,845 shares issued and outstanding                                               |  |                        -  |  |                        7  |
| Cooperative members' contributed capital                                            |  |                        -  |  |              39,531  |
| Nondelivery fee                                                                     |  |                        -  |  |                 1,330  |
| Patronage notices                                                                   |  |               50,642  |  |                        -  |
| Patronage refunds for reinvestment                                                  |  |                        -  |  |               50,752  |
| Unallocated equity                                                                  |  |                        -  |  |               26,375  |
| Accumulated other comprehensive income                                              |  |                      42  |  |                      13  |
| Total capital shares and equities                                                   |  |             116,049  |  |             118,008  |
| Total liabilities and capital shares and equities                                   | $ |             663,764  |  |             663,757  |
|                                                                                     |  |  |  |  |
| See  accompanying notes to consolidated financial statements.                       |  |  |  |  |
|                                                                                     |  |  |  |  |

| 2 |
|---|

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                                     |
|---------------------------------------------------------------------------------|
| **Consolidated Statements of Operations**                                       |
| (in thousands)                                                                  |
|                                                                                 |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                 |  |  | ** ** | ** ** | **13 weeks 	ended** | ** ** | **13 weeks ended** | ** ** | **39 weeks ended** | ** ** | **39 weeks ended** |
|                                                                                 |  |  | ** ** | ** ** | **May 28, 2005** | ** ** | **May 29, 2004** | ** ** | **May 28, 2005** | ** ** | **May 29, 2004** |
|                                                                                 |  |  | ** ** | ** ** | **(unaudited)** | ** ** | **(unaudited)** | ** ** | **(unaudited)** | ** ** | **(unaudited)** |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Net sales                                                                       |  |  |  |  $ |              1,126,574  |  |                1,018,740  |  |                3,204,021  |  |                3,009,082  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Costs and  expenses:                                                            |  |  |  |  |  |  |  |  |  |  |
|                                                                                 | Cost of  sales |  |  |  | 1,082,875  |  |    987,085  |  | 3,131,662  |  | 2,918,517  |
|                                                                                 | Selling, general  and administrative expenses |  | 8,953  |  | 10,429  |  | 26,505  |  | 26,034  |
|                                                                                 | Depreciation  and amortization |  |          6,142  |  | 5,101  |  |                 18,231  |  |        16,745  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                 |  | Total  costs and expenses |  | 1,097,970  |  | 1,002,615  |  | 3,176,398  |  | 2,961,296  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                 |  |  | Operating  income |  | 28,604  |  |        16,125  |  |        27,623  |  |        47,786  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Other  income (expense):                                                        |  |  |  |  |  |  |  |  |  |
|                                                                                 | Interest  income |  |  |                204  |  |                  138  |  |      506  |  |                  506  |
|                                                                                 | Interest  expense |  |  |  (7,330) |  |  (6,711) |  |  (21,793) |  |  (19,842) |
|                                                                                 | Minority  owners' interest in income |  |  |  |  |  |  |  |  |
|                                                                                 |      of  National Beef Packing Co., LLC |  |  (9,867) |  |  (4,944) |  | (1,087) |  |   (14,104) |
|                                                                                 | Minority  owners' interest in net (income) |  |  |  |  |  |  |  |  |
|                                                                                 |      loss of  Kansas City Steak, LLC |  |                    55  |  | (12) |  | (156) |  |              (210) |
|                                                                                 | Equity in  loss of aLF Ventures, LLC |  |  (128) |  |  (149) |  |  (523) |  |  (655) |
|                                                                                 | Interest  rate exchange agreement |  | -  |  |                  124  |  |                  105  |  |                  543  |
|                                                                                 | Other, net |  |  |  |                402  |  |                  299  |  |        (2,074) |  |       2,090  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                 |  |  | Income  before taxes |  |      11,940  |  |            4,870  |  |            2,601  |  |        16,114  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Income tax  expense                                                             |  |  |  |            (843) |  |               (941) |  |        (1,939) |  |        (2,353) |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                 |  |  | Net income |  $ |      11,097  |  |            3,929  |  |                  662  |  |        13,761  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Income per  unit                                                                |  |  |  |  |  |  |  |  |  |  |
|                                                                                 | Basic |  |  |  |  $ | 16.04  |  |  |  | 0.96  |  |  |
|                                                                                 | Diluted |  |  |  |  $ | 15.74  |  |  |  | 0.94  |  |  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Outstanding  weighted-average units                                             |  |  |  |  |  |  |  |  |
|                                                                                 | Basic |  |  |  |  | 691,845  |  |  |  | 691,845  |  |  |
|                                                                                 | Diluted |  |  |  |  | 705,113  |  |  |  | 705,113  |  |  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Pro forma  amounts assuming the conversion to an LLC is applied  retroactively: |  |  |  |  |  |  |  |  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Earnings  per unit                                                              |  |  |  |  |  |  |  |  |  |  |
|                                                                                 | Basic |  |  |  | $ | 16.04  |  | 5.68  |   | 0.96  |   | 19.89  |
|                                                                                 | Diluted |  |  |  | $ | 15.74  |  | 5.58  |   | 0.94  |   | 19.53  |
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| Outstanding  weighted-average units                                             |  |  |  |  |  |  |  |  |
|                                                                                 | Basic |  |  |  |  | 691,845  |  | 691,845  |  | 691,845  |  | 691,845  |
|                                                                                 | Diluted |  |  |  |  | 705,113  |  | 704,632  |  | 705,113  |  | 704,632  |
|                                                                                 |   |  |  |  |  |  |  |  |  |  |  |  |
| See  accompanying notes to consolidated financial statements.                   |  |  |  |  |
|                                                                            |   |   |   |   |
|                                                                            |   |   |   |   |

| 3 |
|---|

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                                        |
|------------------------------------------------------------------------------------|
| **Consolidated Statements of Cash Flows**                                          |
| (in thousands)                                                                     |
|                                                                                    | ** 39 weeks ended** | ** ** | ** 39 weeks ended** |
|                                                                                    | ** May 28, 2005** | ** ** | ** May 29, 2004** |
|                                                                                    | ** ** | ** (unaudited)** | ** ** | ** (unaudited)** |
| Cash flows  from operating activities:                                             |  |  |  |  |
| Net income                                                                         | $ |                      662  |  |                  13,761  |
| Adjustments to reconcile net income to net cash provided  by operating activities: |  |  |  |  |
| Depreciation and amortization                                                      |  |                 18,231  |  |                  16,745  |
| Loss (gain) on disposal of property, plant and equipment                           |  |                    (167) |  |                       123  |
| Minority interest                                                                  |  |                   1,204  |  |                  14,215  |
| Write-off of debt issuance costs                                                   |  |                   3,181  |  |                            -  |
| Interest rate exchange agreement                                                   |  |                    (105) |  |                     (543) |
| Changes in assets and liabilities:                                                 |  |  |  |  |
| Accounts receivable                                                                |  |                      172  |  |                 (3,948) |
| Due from affiliates                                                                |  |                      169  |  |                  (1,072) |
| Other receivables                                                                  |  |                   1,316  |  |                       952  |
| Inventories                                                                        |  |               (10,807) |  |                  (9,222) |
| Other assets                                                                       |  |                    (304) |  |                    2,404  |
| Accounts payable                                                                   |  |                    (244) |  |                  (1,507) |
| Due to affiliates                                                                  |  |                        40  |  |                       (27) |
| Accrued compensation and benefits                                                  |  |                 (1,644) |  |                (10,614) |
| Accrued insurance                                                                  |  |                      666  |  |                  (2,956) |
| Other accrued expenses and liabilities                                             |  |                   7,353  |  |                    2,934  |
| Cattle purchases payable                                                           |  |                   2,857  |  |                       115  |
| Net cash provided by operating activities                                          |  |                 22,580  |  |                  21,360  |
| Cash flows  from investing activities:                                             |  |  |  |  |
| Capital expenditures, including interest capitalized                               |  |               (13,958) |  |                (23,848) |
| Proceeds from sale of property, plant and equipment                                |  |                   1,312  |  |                    1,208  |
| Net cash used in investing activities                                              |  |               (12,646) |  |                (22,640) |
| Cash flows  from financing activities:                                             |  |  |  |  |
| Proceeds from membership and registration fees                                     |  |                          -  |  |                         24  |
| Proceeds from nondelivery fees                                                     |  |                          -  |  |                       235  |
| Net receipts under revolving credit lines                                          |  |                 (9,794) |  |                  30,299  |
| Borrowings of term note payable                                                    |  |                   3,594  |  |                            -  |
| Net repayments of other indebtedness                                               |  |                    (428) |  |                     (455) |
| Payments of notes payable and fees                                                 |  |                 (3,116) |  |                  (5,434) |
| Payments of patronage refunds                                                      |  |                    (956) |  |                  (8,370) |
| Change in overdraft balances                                                       |  |                   4,220  |  |                     (474) |
| Partnership distributions                                                          |  |                 (4,331) |  |                (19,859) |
| Net cash used in financing activities                                              |  |               (10,811) |  |                  (4,034) |
| Effect of  exchange rate changes on cash                                           |  |                        29  |  |                         13  |
| Net  decrease in cash                                                              |  |                    (848) |  |                  (5,301) |
| Cash and  cash equivalents at beginning of the period                              |  |                 43,611  |  |                  42,228  |
| Cash and  cash equivalents at end of the period                                    | $ |                 42,763  |  |                  36,927  |
| Supplemental  information:                                                         |  |  |  |  |
| Cash paid during the period for interest                                           | $ |                 14,085  |  |                  13,132  |
| Cash paid during the period for taxes, net                                         | $ |                        35  |  |                       574  |
|                                                                                    |  |  |  |  |
| See  accompanying notes to consolidated financial statements.                      |  |  |  |  |

 

| 4 |
|---|

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

**(1)Interim Financial Statements**

**Basisof Presentation**

The accompanying unaudited Consolidated FinancialStatements have been prepared in accordance with U.S. generally accepted accountingprinciples (GAAP) for interim financial information; therefore, they do notinclude all of the information and footnotes required by GAAP for completefinancial statements. In the opinion of management, all adjustments considerednecessary for a fair presentation have been included. For further information,refer to the audited Consolidated Financial Statements and Notes toConsolidated Financial Statements, which are included in the Company's Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC) forthe fiscal year ended August 28, 2004.  The results of operations for theinterim periods presented are not necessarily indicative of the results for afull fiscal year.  Certain prior year amounts have been reclassified in orderto conform to the current year presentation.

On August 18, 2004, the shareholders of U.S.Premium Beef, Ltd. approved the merger of the cooperative into a wholly-ownedsubsidiary, U.S. Premium Beef, Inc., a Delaware corporation. The merger waseffective on August 29, 2004. The Delaware corporation then, in a statutoryconversion authorized under Delaware law, converted into a Delaware limitedliability company. Under the new ownership structure, each share of commonstock of the cooperative was converted to one unit of Class A interest and oneunit of Class B interest.  Immediately following the conversion, therewere 691,845 units of Class A interests and 691,845 units of Class Binterests.  For a period to be determined by the board of directors, eachClass A unit will be linked to its corresponding Class B unit and each pair oflinked units must, if transferred, be transferred together.  Patronage refundsfor reinvestment in the cooperative were carried over at their face amount intothe LLC as patronage notices.  

*Class A Interests.*  Holders of Class A interests are entitled to a pro rata share of33% of the profits and losses; to receive distributions of the Company's netcash flow when declared by the board of directors; to participate in thedistribution of the Company's assets in accordance with their positive capitalaccount balances if the Company dissolves or liquidates after payment of the patronagenotices, and, if the holder is a member, to vote on matters submitted to a voteof the Company's members.  Holders of Class A interests are committedunder Uniform Delivery and Marketing Agreements to deliver one head of cattleto the Company annually for each unit held.  

*Class B Interests.*  Holders of Class B interests are entitled to a pro rata share of67% of the profits and losses; to receive distributions of the Company's netcash flow when declared by the board of directors; to participate in thedistribution of the Company's assets in accordance with their positive capitalaccount balances if the Company dissolves or liquidates after the payment ofthe patronage notices, and, if the holder is a member, to vote on matterssubmitted to a vote of the Company's members.  Holders of Class Binterests have no cattle delivery commitment.

*Patronage Notices.*  Patronage notices do not constitute units or membershipinterests in the Company, and holders will not be unitholders or members of theCompany by virtue of holding patronage notices. As was the case in thecooperative, patronage notices will be paid by the Company at such time and insuch amounts as may be determined by the board of directors in its sole andabsolute discretion. Upon liquidation, holders of patronage notices will bepaid before holders of Class A and Class B interests.  Patronage noticescarry no other or additional rights.

NB Finance Corp., a wholly-owned finance subsidiary ofNBP, is a co-issuer on a joint and several basis with NBP of the Senior Notes,which are our senior unsecured obligations, ranking equal in right of paymentwith all of our 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.

| 5 |
|---|

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**(2)Inventories**

Inventories at May 28, 2005 and August 28, 2004 consisted of the following (in thousands):

|                                     | **May 28, 2005** | ** **                                                                                                                                                                            | **August 28, 2004** |
|-------------------------------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
| Dressed  and boxed beef             | $                |                               76,396 |                     | $ |                         67,801 |
| Beef  by-products                   |                  | 10,315                                                                                                                                                                                | ** **          | ** ** | 9,158 |
| Supplies                            |                  | 10,058                                                                                                                                                                                | ** **          | ** ** | 9,003 |
|      Total inventory | $                |                              96,769       |                     | $ |                       85,962 |

** (3)Comprehensive Income**

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

|                                                               | **13 weeks ended**                                                                                                                                       | ** **                                                                | **13 weeks ended** | ** ** | **39 weeks ended** | ** ** | **39 weeks ended**                                                                |
|---------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|--------------------|------------|--------------------|------------|-----------------------------------------------------------------------------------|
|                                                               | **May 28, 2005**                                                                                                                                         | ** **                                                                | **May 29, 2004**   | ** ** | **May 28, 2005**   | ** ** | **May 29, 2004**                                                                  |
| Net income                                                    | $                                                                                                                                                        |             11,097 |                    | $          | 3,929              |            | $                                                                                 | 662 |  | $ | 13,761 |
| Other comprehensive income:                                   |                                                                                                                                                          |                                                                           |                    |            |                    |            |                                                                                   |
| Foreign  currency translation	     adjustments |                           4 |                                                                           | 4                  |            | 29                 |            |               13 |
| Comprehensive  income                                         | $                                                                                                                                                        |             11,101 |                    | $          | 3,933              |            | $                                                                                 | 691 |  | $ | 13,774 |
|                                                               |                                                                                                                                                          |                                                                           |                    |            |                    |            |                                                                                   |  |  |  |  |  |

**(4) Income Taxes**

Subchapter T of the Internal Revenue Code sets forthrules for the tax treatment of cooperatives and applies both to cooperativesexempt from tax under Section 521 of the Internal Revenue Code and to nonexemptcooperatives. Prior to August 29, 2004, the Company operated as an exemptcooperative. As an exempt cooperative, a company is not taxed on amounts ofpatronage and non-patronage source income withheld from its patrons in the formof qualified per-unit retains or on amounts distributed to its patrons in theform of Qualified Written Notices of Allocation. Such amounts are instead taxeddirectly to the patrons. If the Company was not entitled to be taxed underSubchapter T, its income would be taxed to the Company similar to a corporationand the patrons would be taxed when and if dividends are distributed. Thecharacterization of income as patronage or non-patronage source income issubject to challenge by the Internal Revenue Service. Non-patronage sourceincome, if deemed more than incidental, is subject to tax at the entity levelinstead of being passed through to the patrons in the form of a patronage dividend. Notwithstanding the acquisition of a controlling interest in NBP on August 6, 2003, management continues to believe that its non-patronage source income, ifany, is incidental and would vigorously defend any such challenge by theInternal Revenue Service. However, USPB has recognized tax expense in theaccompanying third quarter and year to date fiscal 2004 Consolidated Financial Statementson a portion of its earnings for periods after August 6, 2003 to provide for such potential recharacterization of income from patronage source to non-patronagesource, which may be asserted by the Internal Revenue Service.

Effective August 29, 2004, the Company converted to an LLC, and under this structure, taxes are not provided at the Company levelbecause the results of operations are included in the taxable income of theindividual members.

** **

 

** **

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**(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.  NBP accounts for changes in the redemption value of these interestsby accreting the change in value over the current period through the earliestredemption date of the respective interests. At May 28, 2005, the minority interest in National Beef, included in the minority interest in the accompanyingConsolidated Balance Sheet, was revalued by an independent appraisal process,and the value was determined to be $62.3 million, which closely approximatedits carrying value.  Accordingly, the carrying value of the minority interestin National Beef increased by a negligible amount through accretion during thethirteen weeks ended May 28, 2005, resulting in the $62.3 million carryingvalue at May 28, 2005.

**(6)Contingencies**

*Schumacher vTyson Foods, et al. *On July 1, 2002,a lawsuit was filed against Farmland National Beef Packing Company, L.P. (FNBPCor the predecessor to NBP), ConAgra Beef Company, Tyson Foods, Inc. and ExcelCorporation in the United States District Court for the District of SouthDakota seeking certification of a class of all persons who sold cattle to thedefendants for cash, or on a basis affected by the cash price for cattle,during the period from April 2, 2001 through May 11, 2001 and for some periodup to two weeks thereafter. The case was filed by three named plaintiffs onbehalf of a putative nationwide class that plaintiffs estimate is comprised ofhundreds or thousands of members. The complaint alleges that the defendants, inviolation of the Packers and Stockyards Act of 1921, knowingly used, withoutcorrection or disclosure, incorrect and misleading boxed beef price informationgenerated by the USDA to purchase cattle offered for sale by the plaintiffs ata price substantially lower than was justified by the actual and correct priceof boxed beef during this period. Plaintiffs also seek recovery against alldefendants under a theory of unjust enrichment.  The case was certified as aclass-action matter in June of 2004.  The plaintiffs claim damages againstFNBPC in the amount of $2.39 million plus prejudgment interest, attorneys' feesand court costs.  The claim will be reduced in an unknown amount by the numberof class members who have opted out of the class.  Opt outs were due on June 13, 2005, but the number of opt outs will not be known to the Company untilplaintiffs file a report.  The case is now in discovery.  The Court has orderedthe parties to be ready for trial on December 15, 2005, but no actual trial date has been set.  Management believes that FNBPC acted properly and lawfully indealings with cattle producers. Management is currently unable to evaluate theoutcome of this matter or to estimate the amount of potential loss, if any. Inaccordance with SFAS No. 5, *Accounting for Contingencies*, NBP has notestablished a loss accrual associated with this claim. 

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

**(7)   United States BSE Outbreak**

The closure of U.S. borders to the importation ofCanadian feeder and fattened (ready for slaughter) animals, which occurred inMay 2003 following the discovery of bovine spongiform encephalopathy (BSE) in Alberta that same month, tightened the U.S. cattle supply.  The U.S. beef packing industry hasoperated at a price disadvantage during the ban on importation of Canadianlivestock.   This continued closure of the U.S. border to Canadian livestockhas resulted in higher overall feeder and fed cattle prices in the U.S., negatively impacting raw material prices.  Additionally, the opening of the U.S. border to Canadian produced boxed beef in September 2003 has negatively affected boxedbeef prices.

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On December 23, 2003, it was announced by the UnitedStates Department of Agriculture (USDA) that a single Holstein dairy cow wasdiscovered in the state of Washington to have tested positive for BSE.  Theorigin of the animal was subsequently traced to a farm in Canada.  Shortly after the announcement, several countries, including Japan, representing a substantial share of NBP's export business, closed their borders tothe importation of edible beef products from the United States.  Certainby-products have been classified as Specified Risk Materials (SRMs), and havebeen banned from use in feedstocks and the human food chain. Some of theseproducts previously enjoyed a market in foreign countries.  In FYE 2004, NBP'stotal export sales were approximately 10% of total net sales.

During the second quarter of FYE 2004, NBP recordedcharges to sales and cost of sales totaling approximately $18.8 milliondue to the market impacts of the closure of international borders as a resultof the BSE discovery in late December 2003.      

On December 29, 2004, the USDA announced it had establishedconditions under which it will allow imports into the U.S. of live cattle under 30 months of age and certain other commodities from regions witheffective BSE prevention and detection measures.  Prior to being able to importto the U.S., each country must undergo a thorough risk assessment to berecognized as a "minimal-risk region."  Canada will be the first countryrecognized as a minimal-risk region and, as such, will be eligible to export tothe U.S. live cattle under 30 months of age (subject to certain restrictions),as well as certain other animals and products.  The final rule was published inthe January 4, 2005 *Federal Register* and was to become effective March 7, 2005 unless delayed by litigation, legislation or other reasons. 

On January 2, 2005, the Canadian Food InspectionAgency confirmed that an older dairy cow from Alberta tested positive for BSE. The infected animal was born in 1996, prior to the introduction of the 1997feed ban.    On January 3, 2005, the USDA issued a statement expressingconfidence in the animal and public health measures that Canada has in place,noting that the risk assessment conducted by the USDA as part of the rulemakingprocess to determine Canada's status as a minimal-risk region includedconsideration of the possibility that Canada could experience additional casesof BSE.

On March 2, 2005, the U.S. District Court in Billings, Montana granted a preliminary injunction to delay the implementation of USDA'sminimal-risk regions rule, temporarily blocking the opening of the Canadianborder to the importation of live cattle under 30 months of age into the U.S.  On March 17, 2005, the U.S. Department ofJustice, on behalf of the USDA, filed a request with the U.S. Court of Appealsfor the Ninth Circuit requesting that the court overturn the decision issued bythe U.S. District Court in Montana, which would re-establish trade with Canada for beef products and live cattle under 30 months of age.  The National MeatAssociation along with the Canadian Cattlemen's Association and the AlbertaBeef Producers, who were all denied leave to intervene in the trial court havealso appealed seeking to overturn the preliminary injunction.  Arguments on allthese appeals will be held on July 13, 2005.  It is unknown when the Court ofAppeals will issue its decision.  Trial on the merits of the case is scheduledto commence on July 27, 2005.  It is unknown when the trial court will make adecision.  These actions introduce significant uncertainty regarding the futuretiming and nature of trade in live cattle and beef products between the U.S. and Canada.

Announcements of inconclusive, preliminary test resultsfor BSE can be expected from time to time as a result of the sensitivity of thenew screening regime.  Since the USDA enhanced surveillance program for BSEbegan in 2004, more than 375,000 cattle have been tested for BSE using a rapidtest.  Three of these animals tested inconclusive and were subsequentlysubjected to immunohistchemistry, or IHC, testing.  The IHC is an internationallyrecognized confirmatory test for BSE.  All three inconclusive samples testednegative using IHC.  The three samples were then tested by a secondinternationally recognized confirmatory test, referred to as the Western Blottest.  Of the three samples, two were negative but the third came backreactive.  Because of the conflicting results, the samples from the animal thattested reactive were sent to Weybridge, England for further testing and theresults of that testing were confirmed on June 24, 2005 as positive for BSE.   In a USDA statement issued June 29, 2005, the cow was identified as bornand raised in a herd in Texas and was approximately 12 years old.  In the USDAstatement, USDA Chief Veterinarian John Clifford stated that the USDA believes,"it was most likely infected by consuming feed prior to the implementation ofthe ruminant-to-ruminant feed ban in 1997," and he emphasized "that this animaldid not enter the human food chain." Although the Secretary of the USDA hasstated that there is no risk to animal or human health related to this case, theimpact on the market created by this or other future tests is not possible topredict. 

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The Company cannot presently assess the full economicimpact of the consequences of BSE on the U.S. beef packing industry or on itsoperations.  The Company's revenues and net income may be materially adverselyaffected in the event existing import restrictions continue indefinitely,additional countries announce similar restrictions, additional regulatoryrestrictions are put into effect or domestic consumer demand for beef declinessubstantially.

**(8) Long-term Debt and Loan Agreements**

*SeniorCredit Facilities*

Effective December 30, 2004, NBP amended and restated its existing senior credit facility with a consortium of banks.  The facility nowconsists of a $120.0 million term loan that matures in December 2014 and a$140.0 million revolving line of credit loan that matures in December 2009 thatis subject to certain borrowing base limitations.  The amendment andrestatement is within the scope of the Emerging Issues Task Force (EITF) 96-19,*Debtor's Accounting for a Modification or Exchange of Debt Instruments*as well as EITF 98-14, *Debtor's Accounting for Changes in Line-of-Credit orRevolving-Debt Arrangements*.  In accordance with that guidance, a portionof the unamortized loan costs of approximately $2.6 million from the previouscredit facility as well as additional finance and legal charges associated withthe new amended and restated credit facility of approximately $0.6 million wererecorded in Other, net in the Statement of Operations during the Company'ssecond quarter of fiscal year 2005.  

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

NBP's amended and restated credit facility contains covenantsthat limit its ability to incur additional indebtedness, sell or dispose ofassets, pay certain dividends and prepay or amend certain indebtedness amongother matters.  The amended and restated credit facility also contains aprovision for a conversion to more favorable interest rates and morerestrictive financial covenants on the earlier of (a) June 1, 2006 or (b) the election of NBP (the Conversion Date).  At the election of NBP, interestmay be computed at the Base Rate (as defined in the credit agreement) plus anapplicable margin or a LIBOR rate plus an applicable margin.  As of May 28, 2005, the interest rate for the term loan was equal to LIBOR plus 275 basis points(5.8%) and the weighted average interest rate for the revolving loan was equalto LIBOR plus 250 basis points (5.6%).  After the Conversion Date the interestrate for the term loan and revolving loan is determined by reference to amatrix of rates keyed to NBP's funded debt to EBITDA ratio.

The amended and restated credit facility also imposescertain financial covenants.  From December 30, 2004 until the Conversion Date,NBP is required to  (i) have as of the end of each fiscal quarter aminimum four-quarter rolling EBITDA of $50.0 million and (ii) maintain atall times a minimum Borrowing Base Availability (as defined in the credit agreement)of at least $25.0 million.  After the Conversion Date, NBP will be subject tocovenants imposing a specified maximum funded debt to EBITDA ratio, a maximumsenior secured funded debt to EBITDA ratio, a minimum four-quarter rollingEBITDA and a minimum four-quarter rolling debt service coverage ratio.  Inaddition, NBP's annual net capital expenditures are limited to amounts rangingfrom $32 million in fiscal 2005 to $40 million in fiscal 2008 and fiscal yearsthereafter.  As defined in the amended credit facility, EBITDA containsspecified adjustments.  On May 28, 2005, the Company was in compliance with allfinancial covenants.

Effective July 7, 2005, NBP amended its existing senior credit facility with a consortium of four lenders.  The facility wasamended to allow NBP to purchase up to $30 million in cumulative purchase price(including any premium) of its 10‐1/2% Senior Notes due August 1, 2011 solong as NBP is not in default under the facility at the time of the purchase oras a result of the purchase.

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*IndustrialRevenue Bonds*

In conjunction with the amendment and restatement of NBP'scredit facility, effective December 30, 2004, NBP entered into atransaction with the City of Dodge City (the City), Kansas, in order to provideNBP property tax savings.  Under the transaction, the City purchased NBP's Dodge City facility (the "facility") by issuing $102.3 million in bonds due in December2014, and leased the facility to the Company for an identical term under acapital lease.  The City's bonds were purchased by NBP using proceeds of itsterm loan under the amended and restated credit facility.  Because the City hasassigned the lease to the bond trustee for the benefit of NBP as the sole bondholder,NBP, in effect, controls enforcement of the lease against itself.  As a resultof the capital lease treatment, the facility will remain a component ofproperty, plant and equipment in NBP's Consolidated Balance Sheet.  As a resultof the legal right of offset, the capital lease obligation and thecorresponding bond investments will be eliminated in consolidation.  Thetransaction provides NBP with property tax exemptions for the leased facility,which, after netting payments to the City and local school district underpayment in lieu of tax agreements, result in an annual property tax savings ofapproximately 25%.  The facility remains subject to a prior mortgage andsecurity interest in favor of the lenders under the senior credit facility. Additional revenue bonds may be issued to cover the costs of certainimprovements to this facility.  The total amount of revenue bonds authorizedfor issuance is $120.0 million.

*UtilitiesCommitment*

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

**(9) Earnings Per Unit**

Prior to the conversion from a cooperative to an LLC,per share data had been omitted because, under the cooperative structure,earnings of the Company were distributed as patronage dividends to members andassociate members, those who leased delivery rights from shareholders, based onthe level of business conducted with the Company as opposed to a commonshareholder's proportionate share of underlying equity in the Company.  Underthe LLC structure, earnings of the Company are to be distributed to unitholdersbased on their proportionate share of underlying equity, and, as a result,earnings per unit (EPU) has been presented in the accompanying ConsolidatedStatement of Operations, along with the pro forma amounts for the prior yearfor the same fiscal periods assuming the conversion to an LLC was retroactivelyapplied.

Basic EPU excludes dilution and is computed bydividing income available to unitholders by the weighted-average number ofunits outstanding for the period.  Diluted EPU reflects the potential dilutionthat could occur 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 the Company,the CEO 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 unit for both periods as providedin the CEO employment agreement.  

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| (In  thousands, except unit and per unit data)                              | 13 weeks ended May 28, 2005 |                                   |                       | 39 weeks ended May 28, 2005                                                                  |
|-----------------------------------------------------------------------------|-----------------------------|----------------------------------------|-----------------------|----------------------------------------------------------------------------------------------|
|                                                                             |                             |                                   | Earnings  (Numerator) |                                                                                              | Units  (Denominator) |   |  | Per Unit   Amount |   |  | Earnings  (Numerator) |  | Units  (Denominator) |   |  | Per Unit   Amount |
| Basic  earnings per unit                                                    |                        |                                        |                       |                                                                                              |   |  |  |   |  |  |  |  |   |  |  |
| Income available to unitholders                                             | $                           |   11,097                     |                       |             	691,845             |   | $ |  16.04 |   | $ |   662 |  |          691,845 |   | $ |      0.96 |
| Effect of  dilutive securities - unit options                               |                        |                                        |                       |                 13,268 |   |  |  |   |  |  |  |            13,268 |   |  |  |
| Diluted  earnings per unit                                                  |                        |                                        |                       |                                                                                              |   |  |  |   |  |  |  |  |   |  |  |
| Income  available to unitholders     including assumed conversion | $                           | 11,097                                 |                       | 705,113                                                                                      |   | $ | 15.74 |   | $ | 662 |  | 705,113 |   | $ | 0.94 |
|                                                                             |                             |                                   |                       |                                                                                              |  |   |  |  |   |  |  |  |  |   |  |  |
|                                                                             |                             | Pro Forma  13 weeks ended May 29, 2004 |                  |                                                                                              | Pro Forma  39 weeks ended May 29, 2004 |
|                                                                             |                             |                                   | Earnings  (Numerator) |                                                                                              | Units  (Denominator) |   |  | Per Unit   Amount |   |  | Earnings  (Numerator) |  | Units  (Denominator) |   |  | Per Unit   Amount |
| Basic  earnings per unit                                                    |                        |                                        |                       |                                                                                              |   |  |  |   |  |  |  |  |   |  |  |
| Income  available to unitholders                                            | $                           |   3,929                      |                       |               691,845            |   | $ |       5.68 |   | $ |   13,761 |  |          691,845 |   | $ |      19.89 |
| Effect of  dilutive securities - unit options                               |                        |                                        |                       |                 12,787 |   |  |  |   |  |  |  |            12,787 |   |  |  |
| Diluted  earnings per unit                                                  |                        |                                        |                       |                                                                                              |   |  |  |   |  |  |  |  |   |  |  |
| Income  available to unitholders   including assumed conversion   | $                           |   3,929                           |                       |               704,632            |   | $ |       5.58 |   | $ |  13,761 |  |          704,632 |   | $ |      19.53 |
|                                                                             |                             |                                   |                       |                                                                                              |  |   |  |  |   |  |  |  |  |   |  |  |

* *

* *

 

 

 

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**Item 2.  Management'sDiscussion and Analysis of Financial Condition and Results of Operations**

**DisclosureRegarding Forward-Looking Statements**

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

**IndustryOutlook  **

Recentlegal developments and the discovery of a BSE positive animal in the U.S. have increased the uncertainty of the timing of the border opening for importation oflive cattle to the U.S. from Canada.  Also, while there is a framework of anagreement for the resumption of trade with Japan, it appears trade will not resumefor some time.  Currently live weights of cattle being slaughtered continuehigher than last year, implying supplies of cattle in the near term will be larger;however, until international market access is restored and live cattle arepermitted from Canada, margins can be expected to be negatively impacted. 

**RecentDevelopments**

Effective December 30, 2004, NBP's amended credit facility was amended and restated to reflect changes in loan amounts, interestrates and financial covenants.  In conjunction with the amendment andrestatement of its credit facility, the City of Dodge City, Kansas issued$102.3 million of industrial revenue bonds at the same time that effectivelyresults in annual savings of approximately 25% in property taxes on the Dodge City facility.  These transactions are more fully described in "Liquidity andCapital Resources" below.

The closure of U.S. borders to the importation ofCanadian feeder and fattened (ready for slaughter) animals, which occurred inMay 2003 following the discovery of bovine spongiform encephalopathy (BSE) in Alberta that same month, tightened the U.S. cattle supply.  The U.S. beef packing industry hasoperated at a price disadvantage during the ban on importation of Canadianlivestock.   This continued closure of the U.S. border to Canadian livestockhas resulted in higher overall feeder and fed cattle prices in the U.S., negatively impacting raw material prices.  Additionally, the opening of the U.S. border to Canadian produced boxed beef in September 2003 has negatively affected boxedbeef prices.

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On December 23, 2003, it was announced by the UnitedStates Department of Agriculture (USDA) that a single Holstein dairy cow wasdiscovered in the state of Washington to have tested positive for BSE.  Theorigin of the animal was subsequently traced to a farm in Canada.  Shortly after the announcement, several countries, including Japan, representing a substantial share of NBP's export business, closed their borders tothe importation of edible beef products from the United States.  Certainby-products have been classified as Specified Risk Materials (SRMs), and havebeen banned from use in feedstocks and the human food chain. Some of theseproducts previously enjoyed a market in foreign countries.  In FYE 2004, NBP'stotal export sales were approximately 10% of total net sales.

During the second quarter of FYE 2004, NBP recordedcharges to sales and cost of sales totaling approximately $18.8 milliondue to the market impacts of the closure of international borders as a resultof the BSE discovery in late December 2003.      

On December 29, 2004, the USDA announced it hadestablished conditions under which it will allow imports into the U.S. of live cattle under 30 months of age and certain other commodities from regions witheffective BSE prevention and detection measures.  Prior to being able to importto the U.S., each country must undergo a thorough risk assessment to berecognized as a "minimal-risk region."  Canada will be the first countryrecognized as a minimal-risk region and, as such, will be eligible to export tothe U.S. live cattle under 30 months of age (subject to certain restrictions),as well as certain other animals and products.  The final rule was published inthe January 4, 2005 *Federal Register* and was to become effective March 7, 2005 unless delayed by litigation, legislation or other reasons. 

On January 2, 2005, the Canadian Food InspectionAgency confirmed that an older dairy cow from Alberta tested positive for BSE. The infected animal was born in 1996, prior to the introduction of the 1997feed ban.  On January 3, 2005, the USDA issued a statement expressingconfidence in the animal and public health measures that Canada has in place,noting that the risk assessment conducted by the USDA as part of the rulemakingprocess to determine Canada's status as a minimal-risk region includedconsideration of the possibility that Canada could experience additional casesof BSE.

On March 2, 2005, the U.S. District Court in Billings, Montana granted a preliminary injunction to delay the implementation of USDA'sminimal-risk regions rule, temporarily blocking the opening of the Canadianborder to the importation of live cattle under 30 months of age into the U.S.  On March 17, 2005, the U.S. Department ofJustice, on behalf of the USDA, filed a request with the U.S. Court of Appealsfor the Ninth Circuit requesting that the court overturn the decision issued bythe U.S. District Court in Montana, which would re-establish trade with Canada for beef products and live cattle under 30 months of age.  The National MeatAssociation along with the Canadian Cattlemen's Association and the AlbertaBeef Producers, who were all denied leave to intervene in the trial court havealso appealed seeking to overturn the preliminary injunction.  Arguments on allthese appeals will be held on July 13, 2005.  It is unknown when the Court ofAppeals will issue its decision.  Trial on the merits of the case is scheduledto commence on July 27, 2005.  It is unknown when the trial court will make adecision.  These actions introduce significant uncertainty regarding the futuretiming and nature of trade in live cattle and beef products between the U.S. and Canada.

Announcements of inconclusive, preliminary test resultsfor BSE can be expected from time to time as a result of the sensitivity of thenew screening regime.  Since the USDA enhanced surveillance program for BSEbegan in 2004, more than 375,000 cattle have been tested for BSE using a rapidtest.  Three of these animals tested inconclusive and were subsequentlysubjected to immunohistchemistry, or IHC, testing.  The IHC is aninternationally recognized confirmatory test for BSE.  All three inconclusivesamples tested negative using IHC.  The three samples were then tested by asecond internationally recognized confirmatory test, referred to as the WesternBlot test.  Of the three samples, two were negative but the third came backreactive.  Because of the conflicting results, the samples from the animal thattested reactive were sent to Weybridge, England for further testing and theresults of that testing were confirmed on June 24, 2005, as positive for BSE.  Ina USDA statement issued June 29, 2005, the cow was identified as born andraised in a herd in Texas and was approximately 12 years old.  In the USDAstatement, USDA Chief Veterinarian John Clifford stated that the USDA believes,"it was most likely infected by consuming feed prior to the implementation ofthe ruminant-to-ruminant feed ban in 1997," and he emphasized "that this animaldid not enter the human food chain."  Although the Secretary of the USDA hasstated that there is no risk to animal or human health related to this case, theimpact on the market created by this or other future tests is not possible topredict. 

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We cannot presently assess the full economic impact ofthe consequences of BSE on the U.S. beef packing industry or on ouroperations.  The Company's revenues and net income may be materially adverselyaffected in the event existing import restrictions continue indefinitely,additional countries announce similar restrictions, additional regulatoryrestrictions are put into effect or domestic consumer demand for beef declinessubstantially.

**Resultsof Operations**

***Thirteen weeks ended May 28, 2005 compared to thirteen weeks ended May 29, 2004***

*General.* Net income for the thirteen weeks ended May 28, 2005 was $11.1 million compared to net income of $3.9 million for the thirteen weeks ended May 29, 2004, an increase of $7.2 million or 184.6%.  Sales were higher in the thirteen weeks ended May 28, 2005 than those of the prior year period due to an increase in the number ofcattle processed of approximately 2.3%, at weights that averaged 2.0% higherthan the same period in the prior year. Sales prices improved due to animproved product sales mix and continued growth in value-added sales for thethirteen weeks ended May 28, 2005 as compared to May 29, 2004.

Total costs and expenses of $1,098.0 million and$1,002.6 million, respectively, as a percent of sales were 97.5% for thethirteen weeks ended May 28, 2005 compared to 98.4% for the thirteen weeksended May 29, 2004.  Costs were higher due to a 2.3% increase in the number of cattleprocessed from 2004, combined with higher live cattle prices and higher averagelive weights.  Operating income increased $12.5 million due to boxed beef andbeef product prices rising at a higher rate than live cattle costs. 

*Net Sales*. Net sales were $1,126.6 million for the thirteen weeks ended May 28, 2005 compared to $1,018.7 million for the thirteen weeks ended May 29, 2004, an increase of $107.9 million or 10.6%.  The increase resulted primarily from an increase inboxed beef and beef product prices of approximately 7.0% combined with anapproximate 2.3% increase in the number of cattle processed in 2005. 

                *Costof Sales*.  Cost of sales was $1,082.9 million for the thirteen weeks ended May 28, 2005 compared to $987.1 million for the thirteen weeks ended May 29, 2004, an increase of $95.8 million or 9.7%.  The increase resulted primarily from a 5.8%increase in live cattle prices combined with an increase in the number ofcattle processed from 2004 of 2.3% and an increase in average live weights of2.0%.

                *Selling,General and Administrative Expenses*.  Selling, general and administrativeexpenses were $9.0 million for the thirteen weeks ended May 28, 2005 compared to $10.4 million for the thirteen weeks ended May 29, 2004, a decrease of $1.4 million or 13.5%.   The decrease is due to a $0.5 million decrease in professionalservices, a $0.4 million decrease in payroll and related expenses, a $0.2million decrease in bad debt expense and a $0.3 million decrease in marketingexpense.

                *Depreciationand Amortization Expense*.  Depreciation and amortization expenses were $6.1million for the thirteen weeks ended May 28, 2005 compared to $5.1 million for the thirteen weeks ended May 29, 2004, an increase of $1.0 million or 19.6%.  Depreciationexpense increased due largely to assets being placed into service, primarily atthe Dodge City and Liberal beef plants, at the end of fiscal year 2004 and throughoutthe first three quarters of fiscal year 2005.

*Operating Income*.  Operating income was $28.6 million for the thirteen weeks ended May 28, 2005 compared to $16.1 million for the thirteen weeks ended May 29, 2004, an increase of $12.5 million or 77.6%.  The increase resulted from higher boxed beefand beef product prices, partially offset by higher live cattle prices.  Operatingincome, as a percentage of net sales, was 2.5% for the thirteen weeks ended May 28, 2005 and 1.6% for the thirteen weeks ended May 29, 2004.

                *InterestExpense*.  Interest expense was $7.3 million for the thirteen weeks ended May 28, 2005 compared to $6.7 million for the thirteen weeks ended May 29, 2004, an increase of $0.6 million or 9.0%.  The increase was due primarily to higherinterest rates on NBP's variable rate debt in the thirteen weeks ended May 28, 2005 as compared to the same period in fiscal 2004.

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                *IncomeTax Expense*.  Income tax expense of $0.8 million for the thirteen weeksended May 28, 2005 compared to $0.9 million for the thirteen weeks ended May 29, 2004, a decrease of $0.1 million or 11.1%.  The decrease was primarily due to theconversion from a cooperative to an LLC offset by increased income tax expenseas a result of higher income for the period for National Carriers, Inc. and theassociated income tax expense on income from that entity, which is organized asa C Corporation.

***Thirty-nine weeks ended May 28, 2005 compared to thirty-nine weeksended May 29, 2004***

*General.* Net income for the thirty-nine weeks ended May 28, 2005 was $0.7 million compared to net income of $13.8 million for the thirty-nine weeks ended May 29, 2004, a decrease of $13.1 million or 94.9%.  Sales were higher in the thirty-nineweeks ended May 28, 2005 than those of the prior year period due to an increasein the number of cattle processed of approximately 4.5% combined with anapproximate 3.1% increase in average weights. The loss of export markets due toBSE, the smaller supplies of cattle as a result of the continued closure of theCanadian border to live cattle imports and the on-going importation of boxedbeef products to the U.S. from Canada pressured beef margins in the first halfof fiscal 2005, but recently there has been some improvement in boxed beefprices.

Total costs and expenses as a percent of sales were 99.1%for the thirty-nine weeks ended May 28, 2005 compared to 98.4% for the thirty-nineweeks ended May 29, 2004.  Costs were higher due to a 4.5 % increase in thenumber of cattle processed from 2004, combined with an approximate 3.1%increase in average weights.  Operating income decreased $20.2 million primarilydue to continued pressure on boxed beef and beef product prices relative tolive cattle costs, and to a continuing unfavorable pricing environment forproducts traditionally marketed outside the U.S., especially in the first halfof fiscal 2005.

*Net Sales*. Net sales were $3,204.0 million for the thirty-nine weeks ended May 28, 2005 compared to $3,009.1 million for the thirty-nine weeks ended May 29, 2004, an increase of $194.9 million or 6.5%.  The increase resulted primarily froman increase in the number of cattle processed and higher average weights. Boxed beef and beef product prices were generally pressured by the loss of keyexport markets closed to U.S. beef products due to BSE as well as the continuedflow of boxed beef products from Canada to the U.S.

                *Costof Sales*.  Cost of sales was $3,131.7 million for the thirty-nine weeksended May 28, 2005 compared to $2,918.5 million for the thirty-nine weeks ended May 29, 2004, an increase of $213.2 million or 7.3%.  The increase resultedprimarily from an increase in the number of cattle processed of 4.5% combinedwith an approximate 3.1% increase in average live weights.

                *Selling,General and Administrative Expenses*.  Selling, general and administrativeexpenses were $26.5 million for the thirty-nine weeks ended May 28, 2005 compared to $26.0 million for the thirty-nine weeks ended May 29, 2004, an increase of $0.5 million or 1.9%.  The increase is primarily due to a $0.6 million increase inpayroll and related expenses, an expense for state franchise taxes ofapproximately $0.3 million, offset by a decrease in professional services of$0.2 million.

                *Depreciationand Amortization Expense*.  Depreciation and amortization expenses were $18.2million for the thirty-nine weeks ended May 28, 2005 compared to $16.7 million for the thirty-nine weeks ended May 29, 2004, an increase of $1.5 million or 9.0%. The increase is largely attributable to assets being placed into service at ourprocessing plants at the end of fiscal year 2004 and throughout the first threequarters of fiscal year 2005.

*Operating Income*.  Operating income was $27.6 million for the thirty-nine weeks ended May 28, 2005 compared to $47.8 million for the thirty-nine weeks ended May 29, 2004, a decrease of $20.2 million or 42.3%.  The continued closure of the U.S. border toCanadian livestock and the corresponding reduction in the number of live cattleavailable for processing, along with the loss of key export markets andcontinued flow of boxed beef products from Canada to the U.S has resulted incompressed margins in the U.S. beef packing industry for the first half offiscal year 2005, but recently there has been some improvement in boxed beefprices.  Operating income, as a percentage of net sales, was 0.9% for the thirty-nineweeks ended May 28, 2005 and 1.6% for the thirty-nine weeks ended May 29, 2004.

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                *InterestExpense*.  Interest expense was $21.8 million for the thirty-nine weeksended May 28, 2005 compared to $19.8 million for the thirty-nine weeks ended May 29, 2004, an increase of $2.0 million or 10.1%.  The increase was due primarily tohigher interest rates in the thirty-nine weeks ended May 28, 2005 as compared to the same period in fiscal 2004.

*Other, net.* Other, net non-operating expense was $2.1 million for the thirty-nine weeksended May 28, 2005 compared to non-operating income of $2.1 million for the thirty-nineweeks ended May 29, 2004.  The thirty-nine weeks ended May 28, 2005 included $3.2 million in expense for the write-off of unamortized loan costs associatedwith amending and restating our existing senior credit facility, and the sameperiod in fiscal 2004 included a $1.2 million gain received through thedemutualization of a company which held annuities for NBP employees.

                *IncomeTax Expense*.  Income tax expense was $1.9 million for the thirty-nine weeksended May 28, 2005 compared to $2.4 million for the thirty-nine weeks ended May 29, 2004, a decrease of $0.5 million or 20.8%.  The decrease was primarily due to theconversion from a cooperative to an LLC offset by increased income tax expenseas a result of higher income for the period for National Carriers, Inc. and theassociated income tax expense on income from that entity, which is organized asa C Corporation.

**Liquidityand Capital Resources**

As of May 28, 2005, we had net working capital of $183.4million, which included $0.4 million in distributions payable, and cash andcash equivalents of $42.8 million. At August 28, 2004, we had net working capital of $179.9 million, which included $3.1 million in distributions payable andpatronage refunds payable in cash, and cash and cash equivalents of $43.6million. Our primary sources of liquidity are cash flows from operations andavailable borrowings under our amended credit facility.

As of May 28, 2005, we had $332.6 million of long-termdebt, of which $1.0 million was classified as a current liability. As of May 28, 2005, there were outstanding borrowings of $32.3 million, outstanding letters ofcredit of $44.0 million and available borrowings of $63.7 million under the$140.0 million revolving portion of our amended and restated credit facility. Cashflow from operations and borrowings under our amended credit facility havefunded our working capital requirements, capital expenditures and other generalcorporate purposes.  We were in compliance with all of our financial covenantsunder the amended and restated credit facility as of May 28, 2005.

In addition to outstanding borrowings under ouramended and restated credit facility, we had outstanding borrowings underindustrial revenue bonds of $13.8 million, senior notes of $160.0 million andterm loans of $126.5 million as of May 28, 2005.

*AmendedSenior Credit Facility*

Effective December 30, 2004, NBP amended and restated its existing senior credit facility with a consortium of banks. The facilitynow consists of a $120.0 million term loan that matures in December 2014 and a$140.0 million revolving line of credit loan that matures in December 2009 thatis subject to certain borrowing base limitations.  The amendment andrestatement is within the scope of the Emerging Issues Task Force (EITF) 96-19,*Debtor's Accounting for a Modification or Exchange of Debt Instruments*as well as EITF 98-14, *Debtor's Accounting for Changes in Line-of-Credit orRevolving-Debt Arrangements*.  In accordance with that guidance, a portionof the unamortized loan costs of approximately $2.6 million from the previouscredit facility as well as additional finance and legal charges associated withthe new amended and restated credit facility of approximately $0.6 million wererecorded in Other, net in the Statement of Operations during the Company'ssecond quarter of fiscal year 2005.  

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

NBP's amended and restated credit facility containscovenants that limit its ability to incur additional indebtedness, sell ordispose of assets, pay certain dividends and prepay or amend certainindebtedness among other matters.  The amended and restated credit facilityalso contains a provision for a conversion to more favorable interest rates andmore restrictive financial covenants on the earlier of (a) June 1, 2006 or (b) the election of NBP (the Conversion Date).  At the election of NBP,interest may be computed at the Base Rate (as defined in the credit agreement) plusan applicable margin or a LIBOR rate plus an applicable margin.  As of May 28, 2005, the interest rate for the term loan was equal to LIBOR plus 275 basis points(5.8%) and the weighted average interest rate for the revolving loan was equalto LIBOR plus 250 basis points (5.6%).  After the Conversion Date the interestrate for the term loan and the revolving loan is determined by reference to amatrix of rates keyed to NBP's funded debt to EBITDA (as defined in the creditagreement) ratio.

The amended and restated credit facility also imposes certainfinancial covenants.  From December 30, 2004 until the Conversion Date, NBP isrequired to  (i) have as of the end of each fiscal quarter a minimumfour-quarter rolling EBITDA of $50.0 million and (ii) maintain at alltimes a minimum Borrowing Base Availability (as defined in the credit agreement)of at least $25.0 million.  After the Conversion Date, NBP will be subject tocovenants imposing a specified maximum funded debt to EBITDA ratio, a maximumsenior secured funded debt to EBITDA ratio, a minimum four-quarter rollingEBITDA and a minimum four-quarter rolling debt service coverage ratio.  Inaddition, our annual net capital expenditures are limited to amounts rangingfrom $32 million in fiscal 2005 to $40 million in fiscal 2008 and fiscal yearsthereafter.  As defined in the amended credit facility, EBITDA containsspecified adjustments.  On May 28, 2005, the Company was in compliance with allfinancial covenants.

Effective July 7, 2005, NBP amended its existing senior credit facility with a consortium of four lenders.  The facility wasamended to allow NBP to purchase up to $30 million in cumulative purchase price(including any premium) of its 10‐1/2% Senior Notes due August 1, 2011 solong as NBP is not in default under the facility at the time of the purchase oras a result of the purchase.

*IndustrialRevenue Bonds*

In conjunction with the amendment and restatement of NBP'scredit facility, effective December 30, 2004, NBP entered into atransaction with the City of Dodge City, Kansas, in order to provide NBP propertytax savings.  Under the transaction, the City purchased the Company's Dodge City facility (the facility) by issuing $102.3 million in bonds due in December 2014,and leased the facility to NBP for an identical term under a capital lease.  TheCity's bonds were purchased by NBP using proceeds of its term loan under theamended and restated credit facility.  Because the City has assigned the leaseto the bond trustee for the benefit of NBP as the sole bondholder, NBP, ineffect, controls enforcement of the lease against itself.  As a result of thecapital lease treatment, the facility will remain a component of property,plant and equipment in NBP's Consolidated Balance Sheet.  As a result of thelegal right of offset, the capital lease obligation and the corresponding bondinvestments will be eliminated in consolidation.  The transaction provides NBPwith property tax exemptions for the leased facility, which, after nettingpayments to the City and local school district under payment in lieu of taxagreements, result in an annual property tax savings of approximately 25%.  Thefacility remains subject to a prior mortgage and security interest in favor ofthe lenders under the senior credit facility.  Additional revenue bonds may beissued to cover the costs of certain improvements to this facility.  The totalamount of revenue bonds authorized for issuance is $120.0 million.

 

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*UtilitiesCommitment ** ***

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

Capital spending through the thirty-nine weeks ended May 28, 2005 was approximately $14.0 million.  NBP expects to spend somewhat less than $25million in total on capital expenditures during fiscal year 2005, primarily forplant expansion, renewals and improvements. 

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

*OperatingActivities*

                Netcash provided by operating activities in the thirty-nine weeks ended May 28, 2005 was $22.6 million compared to $21.4 million in the thirty-nine weeks ended May 29, 2004, primarily the result of a decrease in net earnings in the current yearperiod, offset by a decrease in working capital requirements.

*InvestingActivities*

                Netcash used in investing activities was $12.6 million in the thirty-nine weeksended May 28, 2005 compared to $22.6 million in the thirty-nine weeks ended May 29, 2004.  This decrease in cash used was primarily attributable to $9.9 million lessin expenditures for property, plant and equipment in the current year.

*FinancingActivities*

                Netcash used in financing activities was $10.8 million in the thirty-nine weeksended May 28, 2005 compared to net cash used in financing activities of $4.0million in the thirty-nine weeks ended May 29, 2004.  The change was primarily attributed to a $22.9 million decrease in member and partnership cashdistributions, a $5.9 million net increase in borrowings on the term note payableand other indebtedness and a $4.7 change in overdraft balances, offset by a $40.1million difference in the thirty-nine week change of fiscal 2004 as compared tothe thirty-nine week change in fiscal 2005 in revolving credit borrowings.

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

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

*Commodities.*NBPuses various raw materials, many of which are commodities. Raw materials aregenerally available from several different sources, and 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 itsability 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 of Operationsas a component of costs of goods sold.

NBP purchases cattle for use in its processingbusinesses. When appropriate, it enters into forward purchase contracts atprices determined prior to the delivery of the cattle. The commodity price riskassociated with these activities can be hedged by selling (or buying) theunderlying commodity, or by using an appropriate commodity derivative instrument.The particular hedging instrument NBP uses depends on a number of factors,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, it enters into forward sales contracts at pricesdetermined prior to shipment. While this may tend to limit its ability toparticipate in gains from commodity price fluctuations, it also tends to reducethe risk of loss from changes in commodity beef prices. NBP reflects commoditycontract gains and losses as adjustments to the basis of underlying commoditiessold; gains or losses are recognized in the Statement of Operations as acomponent of net sales.

NBP may use futures contracts 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 commitments at fair value. Most firmcommitments 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 hedged transactionaffects earnings. For derivatives that are not designated as hedginginstruments, or for the ineffective portion of a hedging instrument, the changein fair value does affect current period net earnings.

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

Thefollowing table describes the number of futures positions and the fair value ofthose positions and related firm commitments at May 28, 2005 and August 28, 2004.  A position in live cattle consists of 40,000 pounds.  Firm commitments forpurchase are for live cattle and firm commitments for sales are for boxed beef(dollars in thousands).

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| ** **                                                                    | ** ** | **Positions expiring** |  | ** **                                                                |
|-------------------------------------------------------------------------------|------------|------------------------|--|---------------------------------------------------------------------------|
| **May 28, 2005**                                                              | ** ** | **within 1 year**      |  | **Fair Value**                                                            |
| Live Cattle                                                                   |            |                        |  |                                                                           |
|      Futures long . . . . .  . . . . . . . . . . . . . .  |            |                        |  | $             | - |
|      Futures short . . . .  . . . . . . . . . . . . . . . |            | 1,121                  |  | (166)                                                                     |
|      Firm Commitments  Purchase . . . . . .               |            |                        |  | 177                                                                       |
|      Firm Commitments Sale . . . . . . . . .              |            |                        |  |     -                                                      |
|                                                                               |            |                        |  |                                                                           |
| **August 28, 2004**                                                           |            |                        |  |                                                                           |
| Live Cattle                                                                   |            |                        |  |                                                                           |
|      Futures long . . . . .  . . . . . . . . . . . . . .  |            |                        |  | $                                                                         | - |
|      Futures short . . . .  . . . . . . . . . . . . . . . |            | 55                     |  | 96                                                                        |
|      Firm Commitments  Purchase . . . . . .               |            |                        |  | (96)                                                                      |
|      Firm Commitments Sale . . . . . . . . .              |            |                        |  |   -                                                                  |

*Interest Rates.*As a result of the Company's normal borrowing and leasing activities,our operating 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 short-term and long-term debt with variableinterest rates. Short-term debt is primarily comprised of the current portionof long-term debt maturing twelve months from the balance sheet date. 

The interest rate exchange agreement, whicheffectively resulted in converting variable-rate debt into fixed-rate debt, onUSPB's CoBank term loan, terminated on January 3, 2005.  As a result, USPB is now exposed to fluctuations in interest rates.  The interest rate exchangeagreement fixed the 90 day LIBOR index at 6.153%.  At May 28, 2005, the 90 day LIBOR index was 3.1%.

**Item 4.  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 ChiefExecutive Officer and Principal Financial and Accounting Officer. Based uponthat evaluation, as of the end of the period covered by this Quarterly Reporton Form 10-Q, our Chief Executive Officer and Principal Financial andAccounting Officer concluded that our disclosure controls and procedures wereeffective in alerting them, in a timely manner, to material informationrequired to be included in our periodic Securities and Exchange Commissionfilings.  There have been no changes in our internal controls over financialreporting during the thirteen weeks ended May 28, 2005 that have materiallyaffected, or are reasonably likely to materially affect, our internal controlover financial reporting.  The design of any system of controls and proceduresis based in part upon certain assumptions about the likelihood of futureevents. 

**PARTII. OTHER INFORMATION**

**Item 1. Legal Proceedings**

     For informationregarding legal proceedings, see Note 6, "Contingencies" to our Consolidated FinancialStatements included in Part I- Item 1 of this Form 10-Q. 

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

     None. 

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**Item 3. Defaults Upon Senior Securities**

     None. 

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

     None. 

**Item 5. Other Information**

     NBP maypurchase a portion of its outstanding Senior Notes from time to time inaccordance with the limits imposed under its senior credit facility. 

 **Item 6. Exhibits**

| (A) |  | Exhibits |
|-----|--|----------|

|         |  |                                                                                                                                                                                                                                                                                                                 |
|---------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1 (a) |  | Limited Liability Company  Agreement of National Beef Packing Company, LLC, (NBP), as of August 6, 2003.  (incorporated by reference to Exhibit 3.1 (a) to NBP's Quarterly Report on Form 10-Q  for the period ended May 28, 2005, filed with the Commission on July 11, 2005).                                 |
|         |  |                                                                                                                                                                                                                                                                                                                 |
| 3.1 (b) |  | Amendment to the Limited Liability Company Agreement of	National Beef Packing Company, LLC, (NBP) as  of July 7, 2005.  (incorporated by reference to Exhibit 3.1 (b) to NBP's  Quarterly Report on Form 10-Q for the period ended May 28, 2005, filed with the Commission on July 11, 2005.) .                 |
|         |  |                                                                                                                                                                                                                                                                                                                 |
| 10.1    |  | First Amendment to Fourth  Amended and Restated Credit Agreement dated as of July 7, 2005, by and among NBP, certain agents, lenders and issuers. (incorporated by reference to  Exhibit 10.1 to NBP's Quarterly Report on Form 10-Q for the period ended May 28, 2005, filed with the Commission on July 11, 2005). |
|         |  |                                                                                                                                                                                                                                                                                                                 |
| 31.1    |  | Certification of the Chief  Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002.                                                                                                                                                                                                       |
|         |  |                                                                                                                                                                                                                                                                                                                 |
| 31.2    |  | Certification of the  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.                                                                                                                                                   |
|         |  |                                                                                                                                                                                                                                                                                                                 |
| 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**

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

                                                                                                               

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

|     |  |                                                              |
|-----|--|-----------------------------------------------------------------------------|
| By: |  | /s/ Danielle Imel                                                           |
|     |  | Danielle Imel* Treasurer	(Principal Financial and Accounting Officer)* |

Date: July 11, 2005 

 

 

 

 

 

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