___________

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 February 26, 2005or


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


For the transition
  period from 
  to .


Commission
file number 333-115164U.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(Address of principal executive
offices)

Telephone:
(866) 877-2525(Registrant's telephone number,
including area code)

Indicate by
check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x 
No o

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

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

___________




TABLE OF CONTENTS

PART I.
  FINANCIAL INFORMATION
  
  Page No.Item 1.
  Financial Statements.
  
  1Item 2.
  Management's Discussion and Analysis of Financial
  Conditionand Results of Operations.
  
  11Item 3.
  Quantitative and Qualitative Disclosures About Market
  Risk.
  
  17Item 4.
  Controls and Procedures.
  
  19PART II.
  OTHER INFORMATIONItem 1.
  Legal Proceedings.
  
  20Item 2.
  Unregistered Sales of Equity Securities and Use of
  Proceeds.
  
  20Item 3.
  Defaults Upon Senior Securities.
  
  20Item 4.
  Submission of Matters to a Vote of Security Holders.
  
  20Item 5.
  Other Information.
  
  20Item 6.
  Exhibits.
  
  20Signatures.
  
  22


Unless the context indicates or otherwise requires, the
terms "the Company", "we", "our" and "us" refer to U.S. Premium Beef, LLC
(formerly known as U.S. Premium Beef, Ltd.) and 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 Delaware
limited liability company, and "USPB" refers to U.S. Premium Beef, LLC
(formerly known U.S. Premium Beef, Ltd.) prior to consolidation.



ii





PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.









1







U.S. PREMIUM BEEF, LLC AND SUBSIDIARIESConsolidated Balance Sheets(in
			thousands, except unit and share data)February 26,
			
			August 28,Assets
			2005
			
			2004(unaudited)Current assets:Cash
			and cash equivalents
			$
			64,015
			
			43,611Accounts receivable, less allowance for returns and doubtfulaccounts of $5,767 and $5,614 in 2005 and 2004, respectively
			
			153,530
			
			177,614Due
			from affiliates
			
			2,214
			
			2,873Other
			receivables
			
			3,617
			
			4,513Inventory
			
			84,312
			
			85,962Other
			current assets
			
			10,401
			
			10,782Total
			current assets
			
			318,089
			
			325,355Property, plant and equipment,
			at cost
			
			251,802
			
			242,903Less
			accumulated depreciation
			
			(31,821)
			
			(20,844)Net
			property, plant and equipment
			
			219,981
			
			222,059Goodwill
			
			78,858
			
			78,858Other intangible assets, net of
			accumulated amortizationof
			$2,528 and $1,722 in 2005 and 2004, respectively
			
			29,233
			
			30,039Other assets
			
			7,103
			
			7,446Total
			assets
			$
			653,264
			
			663,757Liabilities and Capital Shares and EquitiesCurrent liabilities:Current installments of long-term debt
			$
			1,051
			
			10,483Cattle purchases payable
			
			53,734
			
			49,569Accounts payable
			
			38,556
			
			39,455Due
			to affiliates
			
			398
			
			416Patronage refunds payable in cash
			
			-
			
			847Accrued compensation and benefits
			
			16,760
			
			20,828Accrued insurance
			
			15,754
			
			13,903Other
			accrued expenses and liabilities
			
			10,574
			
			7,690Distributions payable
			
			412
			
			2,296Total
			current liabilities
			
			137,239
			
			145,487Long-term liabilities:Long-term debt, excluding current maturities
			
			352,513
			
			331,812Interest rate exchange agreement
			
			-
			
			105Other
			liabilities
			
			4,890
			
			5,237Total
			long-term liabilities
			
			357,403
			
			337,154Total
			liabilities
			
			494,642
			
			482,641Minority interest in National
			Beef Packing Company and Kansas City Steak, LLC
			
			53,674
			
			63,108Capital shares and equities:Members' capital, 691,845 class A units and 691,845 class B unitsauthorized, issued and outstanding
			
			54,268
			
			-Common stock, $0.01 par value; authorized 5,000,000 shares,691,845 shares issued and outstanding
			
			-
			
			7Cooperative members' contributed capital
			
			-
			
			39,531Nondelivery fee
			
			-
			
			1,330Patronage notices
			
			50,642
			
			-Patronage refunds for reinvestment
			
			-
			
			50,752Unallocated equity
			
			-
			
			26,375Accumulated other comprehensive income
			
			38
			
			13Total
			capital shares and equities
			
			104,948
			
			118,008Total
			liabilities and capital shares and equities
			$
			653,264
			
			663,757See accompanying notes to
			consolidated financial statements.






2







U.S. PREMIUM BEEF, LLC AND
			SUBSIDIARIESConsolidated Statements of Operations(in thousands, except unit and per unit data)13 weeks ended
			
			13 weeks ended
			
			26 weeks ended
			
			26 weeks endedFebruary 26, 2005
			
			February 28, 2004
			
			February 26, 2005
			
			February 28, 2004(unaudited)
			
			(unaudited)
			
			(unaudited)
			
			(unaudited)Net sales
			
			
			
			$
			1,026,727
			
			932,036
			
			2,077,447
			
			1,990,342Costs and expenses:Cost of sales
			
			
			
			1,014,598
			
			912,563
			
			2,048,787
			
			1,931,432Selling, general and
			administrative expenses
			
			9,262
			
			8,320
			
			18,254
			
			16,174Depreciation and amortization
			
			6,051
			
			4,975
			
			12,089
			
			11,644Total costs and expenses
			
			1,029,911
			
			925,858
			
			2,079,130
			
			1,959,250Operating (loss) income
			
			(3,184)
			
			6,178
			
			(1,683)
			
			31,092Other income (expense):Interest income
			
			
			156
			
			190
			
			301
			
			368Interest expense
			
			
			(6,907)
			
			(6,134)
			
			(13,761)
			
			(12,562)Minority owner's interest in net
			loss (income)of National Beef Packing Co.,
			LLC
			
			6,398
			
			(540)
			
			8,780
			
			(9,160)Minority owners' interest in net
			incomeof Kansas City Steak, LLC
			
			(157)
			
			(190)
			
			(211)
			
			(198)Equity in loss of aLF Ventures,
			LLC
			
			(273)
			
			(195)
			
			(395)
			
			(506)Interest rate exchange agreement
			
			27
			
			68
			
			105
			
			419Other, net
			
			
			
			(2,956)
			
			1,429
			
			(2,476)
			
			1,791(Loss) income before taxes
			
			(6,896)
			
			806
			
			(9,340)
			
			11,244Income tax expense
			
			
			
			(557)
			
			(581)
			
			(1,095)
			
			(1,412)Net (loss) income
			$
			(7,453)
			
			225
			
			(10,435)
			
			9,832Loss per unitBasic
			
			
			
			$
			(10.77)
			
			
			
			(15.08)Diluted
			
			
			
			$
			(10.77)
			
			
			
			(15.08)Outstanding weighted-average
			unitsBasic
			
			
			
			
			691,845
			
			
			
			691,845Diluted
			
			
			
			
			691,845
			
			
			
			691,845Pro forma amounts assuming the
			conversion to an LLCis applied retroactively:(Loss) earnings per unitBasic
			
			
			
			$
			(10.77)
			
			0.33
			
			(15.08)
			
			14.21Diluted
			
			
			
			$
			(10.77)
			
			0.32
			
			(15.08)
			
			13.95Outstanding weighted-average
			unitsBasic
			
			
			
			
			691,845
			
			691,845
			
			691,845
			
			691,845Diluted
			
			
			
			
			691,845
			
			704,572
			
			691,845
			
			704,572See accompanying notes to
			consolidated financial statements.






3







U.S. PREMIUM BEEF, LLC AND SUBSIDIARIESConsolidated Statements of Cash Flows(in
			thousands)26 weeks ended
			
			26 weeks endedFebruary 26,
			2005
			
			February 28,
			2004(unaudited)
			
			(unaudited)Cash flows from operating
			activities:Net
			(loss) income
			$
			(10,435)
			
			9,832Adjustments to reconcile net (loss) income to net cash provided by
			operating activities:Depreciation and amortization
			
			12,089
			
			11,644Loss
			(gain) on disposal of property, plant and equipment
			
			(25)
			
			33Minority interest
			
			(8,609)
			
			9,259Write-off of debt issuance costs
			
			3,181
			
			-Interest rate exchange agreement
			
			(105)
			
			(419)Changes in assets and liabilities:Accounts receivable
			
			24,084
			
			12,719Due
			from affiliates
			
			659
			
			(892)Other
			receivables
			
			896
			
			603Inventories
			
			1,650
			
			4,101Other
			assets
			
			(2,457)
			
			(322)Accounts payable
			
			996
			
			(1,310)Due
			to affiliates
			
			(18)
			
			256Accrued compensation and benefits
			
			(4,068)
			
			(14,030)Accrued insurance
			
			1,851
			
			(2,972)Other
			accrued expenses and liabilities
			
			2,537
			
			(1,793)Cattle purchases payable
			
			(1,853)
			
			(2,587)Net
			cash provided by operating activities
			
			20,373
			
			24,122Cash flows from investing
			activities:Capital expenditures, including interest capitalized
			
			(9,977)
			
			(15,163)Proceeds from sale of property, plant and equipment
			
			797
			
			520Net
			cash used in investing activities
			
			(9,180)
			
			(14,643)Cash flows from financing
			activities:Proceeds from membership and registration fees
			
			-
			
			15Proceeds from nondelivery fees
			
			-
			
			211Net
			receipts under revolving credit lines
			
			10,941
			
			20,800Borrowings of term note payable
			
			3,594
			
			-Net
			repayments of other indebtedness
			
			(407)
			
			(408)Repayments of notes payable and fees
			
			(2,859)
			
			(3,618)Payments of patronage refunds
			
			(956)
			
			(8,370)Change in overdraft balances
			
			2,792
			
			(4,164)Partnership distributions
			
			(3,919)
			
			(19,375)Net
			cash provided by (used in) financing activities
			
			9,186
			
			(14,909)Effect of exchange rate changes
			on cash
			
			25
			
			9Net increase (decrease) in cash
			
			20,404
			
			(5,421)Cash and cash equivalents at
			beginning of the period
			
			43,611
			
			42,228Cash and cash equivalents at end
			of the period
			$
			64,015
			
			36,807Supplemental information:Cash
			paid during the period for interest
			$
			11,828
			
			11,492Cash
			paid during the period for taxes, net
			$
			33
			
			383See accompanying notes to
			consolidated financial statements.






4







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



(1)
Interim Financial Statements

Basis
of Presentation

The accompanying unaudited Consolidated Financial Statements
have been prepared in accordance with U.S. generally accepted accounting
principles (GAAP) for interim financial information; therefore, they do not
include all of the information and footnotes required by GAAP for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. For further information,
refer to the audited Consolidated Financial Statements and Notes to
Consolidated Financial Statements, which are included in the Company's Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC) for
the fiscal year ended August 28, 2004.  The results of operations for the
interim periods presented are not necessarily indicative of the results for a
full fiscal year.  Certain prior year amounts have been reclassified to 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-owned
subsidiary, U.S. Premium Beef, Inc., a Delaware corporation. The merger was
effective on August 29, 2004. The Delaware corporation then, in a statutory
conversion authorized under Delaware law, converted into a Delaware limited
liability company. Under the new ownership structure, each share of common
stock of the cooperative was converted to one unit of Class A interest and one
unit of Class B interest.  Immediately following the conversion, there
were 691,845 units of Class A interests and 691,845 units of Class B interests. 
For a period to be determined by the board of directors, each Class A unit will
be linked to its corresponding Class B unit and each pair of linked units must,
if transferred, be transferred together.  Patronage refunds for reinvestment
in the cooperative were carried over at their face amount into the LLC as patronage
notices.

Class A Interests.  Holders of Class A interests are entitled to a pro rata share of
33% of the profits and losses; to receive distributions of the Company's net
cash flow when declared by the board of directors; to participate in the
distribution of the Company's assets if it dissolves or liquidates after
payment of the patronage notices, and, if the holder is a member, to vote on
matters submitted to a vote of the Company's members.  Holders of Class A
interests are committed under Uniform Delivery and Marketing Agreements to
deliver one head of cattle to the Company annually for each unit held.

Class B Interests.  Holders of Class B interests are entitled to a pro rata share of
67% of the profits and losses; to receive distributions of the Company's net
cash flow when declared by the board of directors; to participate in the
distribution of the Company's assets if it dissolves or liquidates after the
payment of the patronage notices, and, if the holder is a member, to vote on
matters submitted to a vote of the Company's members.  Holders of Class B
interests have no cattle delivery commitment.

Patronage Notices.  Holders of patronage notices do not constitute units or membership
interests in the Company, and holders will not be unitholders or members of the
Company by virtue of holding patronage notices. As was the case in the
cooperative, patronage notices will be paid by the Company at such time and in
such amounts as may be determined by the board of directors in its sole and
absolute discretion. Upon liquidation, holders of patronage notices will be
paid before holders of Class A and Class B interests.  Patronage notices
carry no other or additional rights.

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

5





(2)
Inventories

Inventories at February 26, 2005 and August 28, 2004 consisted of the following (in thousands):

|                         | February 26, 2005 |        | August 28, 2004
|------------------------ | ----------------- | ------ | ---------------
|Dressed
  and boxed beef | $                 | 65,807 |                
|Beef
  by-products       |                   | 8,862  |                
|Supplies                 |                   | 9,643  |                
|Total inventory          | $                 | 84,312 |                

(3)
Comprehensive (Loss) Income

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

13 weeks ended
		
		13 weeks ended
		
		26 weeks ended
		
		26 weeks endedFebruary 26, 
		2005
		
		February 28, 
		2004
		
		February 26, 
		2005
		
		February 28, 
		2004Net (loss) income
		$
		(7,453)
		
		$
		225
		
		$
		(10,435)
		
		$
		9,832Other comprehensive income:Foreign
  currency translation
		   
  adjustments
		9
		
		2
		
		25
		
		9Comprehensive
  (loss) income
		$
		(7,444)
		
		$
		227
		
		$
		(10,410)
		
		$
		9,841


(4) 
Income Taxes

Subchapter T of the Internal Revenue Code sets forth
rules for the tax treatment of cooperatives and applies both to cooperatives
exempt from tax under Section 521 of the Internal Revenue Code and to nonexempt
cooperatives. Prior to August 29, 2004, the Company operated as an exempt
cooperative. As an exempt cooperative, a company is not taxed on amounts of
patronage and non-patronage source income withheld from its patrons in the form
of qualified per-unit retains or on amounts distributed to its patrons in the
form of Qualified Written Notices of Allocation. Such amounts are instead taxed
directly to the patrons. If the Company was not entitled to be taxed under
Subchapter T, its income would be taxed to the Company similar to a corporation
and the patrons would be taxed when and if dividends are distributed. The
characterization of income as patronage or non-patronage source income is
subject to challenge by the Internal Revenue Service. Non-patronage source
income, if deemed more than incidental, is subject to tax at the entity level
instead 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, if
any, is incidental and would vigorously defend any such challenge by the
Internal Revenue Service. However, USPB has recognized tax expense in the
accompanying second quarter and year to date fiscal 2004 consolidated financial
statements on a portion of its earnings for periods after August 6, 2003 to provide for such potential recharacterization of income from patronage source to
non-patronage source, 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 level
because the results of operations are included in the taxable income of the
individual members.

(5) 
Minority Interest

At any time after certain dates, the earliest being July
31, 2008, the latest being July 31, 2011, certain members of management of NBP and/or
NBPCo Holdings have the right to request that NBP repurchase their interests,
the value of which is to be determined by a mutually agreed appraisal process.
If NBP is unable to elect the repurchase within a specified time, the
requesting member(s) have the right to cause a sale process to commence. NBP
accounts for changes in the redemption value of these interests by accreting
the change in value over the current period through the earliest redemption
date of the respective interests. At February 26, 2005, the minority interest
in National Beef, included in the minority interest in the accompanying
Consolidated Balance Sheet, was revalued by an independent appraisal process,
and the value was determined to be $53.4 million, which was in excess of the
carrying value. Accordingly, the carrying value of the minority interest in
National Beef increased by approximately $0.03 million through accretion during
the thirteen weeks ended February 26, 2005, resulting in the $52.9 million carrying
value at February 26, 2005.



6







(6)
Contingencies

On July 1, 2002, a
lawsuit was filed against Farmland National Beef Packing Company, L.P. (FNBPC
or the predecessor to NBP), ConAgra Beef Company, Tyson Foods, Inc. and Excel
Corporation in the United States District Court for the District of South
Dakota seeking certification of a class of all persons who sold cattle to the
defendants 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 period
up to two weeks thereafter. The case was filed by three named plaintiffs on
behalf of a putative nationwide class that plaintiffs estimate is comprised of
hundreds or thousands of members. The complaint alleges that the defendants, in
violation of the Packers and Stockyards Act of 1921, knowingly used, without
correction or disclosure, incorrect and misleading boxed beef price information
generated by the USDA to purchase cattle offered for sale by the plaintiffs at
a price substantially lower than was justified by the actual and correct price
of boxed beef during this period. Plaintiffs also seek recovery against all
defendants under a theory of unjust enrichment.  The plaintiffs claim damages
against FNBPC in the amount of $2.39 million plus prejudgment interest,
attorneys' fees and court costs.  The case was certified as a class-action
matter in June of 2004.  It is now in discovery.  The Court has ordered the
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 in
dealings with cattle producers. Management is currently unable to evaluate the
outcome of this matter or to estimate the amount of potential loss, if any. In
accordance with SFAS No. 5, Accounting for Contingencies, NBP has not
established a loss accrual associated with this claim.

The Company is also a party to a number of other
lawsuits and claims arising out of the operation of our business. Management
believes the ultimate resolution of such matters should not have a material
adverse effect on our financial condition, results of operations or liquidity.

(7) 
  United States BSE Outbreak

The closure of U.S. borders to the importation of
Canadian feeder and fattened (ready for slaughter) animals, which occurred in
May 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 has
operated at a price disadvantage during the ban on importation of Canadian
livestock.   This continued closure of the U.S. border to Canadian livestock
has 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 boxed
beef prices.

On December 23, 2003, it was announced by the United
States Department of Agriculture (USDA) that a single Holstein dairy cow was
discovered in the state of Washington to have tested positive for BSE.  The
origin 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 to
the importation of edible beef products from the United States.  Certain
by-products have been classified as Specified Risk Materials (SRMs), and have
been banned from use in feedstocks and the human food chain.  Some of these
products previously enjoyed a market in foreign countries. In FYE 2004, NBP's
total export sales were approximately 10% of total net sales.

7





During the second quarter of FYE 2004, NBP recorded
charges to sales and cost of sales totaling approximately $18.8 million
due to the market impacts of the closure of international borders as a result
of the BSE discovery in late December 2003.

On December 29, 2004, the USDA announced it had established
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 with
effective BSE prevention and detection measures.  Prior to being able to import
to the U.S., each country must undergo a thorough risk assessment to be
recognized as a "minimal-risk region."  Canada will be the first country
recognized as a minimal-risk region and, as such, will be eligible to export to
the U.S. live cattle under 30 months of age (subject to certain restrictions),
as well as certain other animals and products.  The final rule was published in
the January 4, 2005 Federal Register and was to become effective March 7, 2005 unless delayed by litigation, legislation or other reasons.

On January 2, 2005, the Canadian Food Inspection
Agency 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 1997
feed ban.  On January 3, 2005, the USDA issued a statement expressing
confidence 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 rulemaking
process to determine Canada's status as a minimal-risk region included
consideration of the possibility that Canada could experience additional cases
of BSE.

On March 2, 2005, the U.S. District Court in Billings, Montana granted a preliminary injunction to delay the implementation of USDA's
minimal-risk regions rule, temporarily blocking the opening of the Canadian
border to the importation of live cattle under 30 months of age into the U.S.  On March 17, 2005, the U.S. Department of
Justice, on behalf of the USDA, filed a request with the U.S. Court of Appeals
for the Ninth Circuit requesting that the court overturn the decision issued by
the U.S. District Court in Montana which would re-establish trade with Canada for beef products and live cattle under 30 months of age.  These actions introduce
significant uncertainty regarding the future timing and nature of trade in live
cattle and beef products between the U.S. and Canada.

Announcements of inconclusive, preliminary test results
for BSE can be expected from time to time as a result of the sensitivity of the
new screening regime.  The impact on the market created by such uncertainty is
not possible to predict.

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

(8) 
Long-Term Debt and Loan Agreements

Senior
Credit Facilities

Effective December 30, 2004, NBP amended and restated its existing senior credit facility with a consortium of banks.  The facility now
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 that
is subject to certain borrowing base limitations.  The amendment and
restatement 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 or
Revolving-Debt Arrangements.  In accordance with that guidance, a portion
of the unamortized loan costs of approximately $2.6 million from the previous
credit facility as well as additional finance and legal charges associated with
the new amended and restated credit facility of approximately $0.6 million were
recorded in Other, net in the Consolidated Statement of Operations during the
second quarter of fiscal year 2005.

8





The borrowings under the revolving loan are available for
NBP's working capital requirements, capital expenditures and other general
corporate purposes.  The amended and restated credit facility is secured by a
first priority lien on substantially all of NBP's assets.  The principal amount
outstanding under the term loan is due and payable in equal quarterly
installments 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
covenants that limit its ability to incur additional indebtedness, sell or
dispose of assets, pay certain dividends and prepay or amend certain
indebtedness among other matters.  The amended and restated credit facility
also contains a provision for a conversion to more favorable interest rates and
more 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)
plus an applicable margin or a LIBOR rate plus an applicable margin.  As of February 26, 2005, the interest rate for the term loan was equal to LIBOR plus 275 basis
points and the interest rate for the revolving loan was equal to LIBOR plus 250
basis points.  After the Conversion Date the interest rate for the term loan and
revolving loan is determined by reference to a matrix of rates keyed to NBP's
funded debt to EBITDA ratio.

The amended and restated credit facility also imposes
certain financial covenants.  From December 30, 2004 until the Conversion Date,
NBP is required to  (i) have as of the end of each fiscal quarter a
minimum four-quarter rolling EBITDA of $50.0 million and (ii) maintain at
all 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 to
covenants imposing a specified maximum funded debt to EBITDA ratio, a maximum
senior secured funded debt to EBITDA ratio, a minimum four-quarter rolling
EBITDA and a minimum four-quarter rolling debt service coverage ratio.  In
addition, NBP's annual net capital expenditures are limited to amounts ranging
from $32 million in fiscal 2005 to $40 million in fiscal 2008 and fiscal years
thereafter.  As defined in the amended credit facility, EBITDA contains
specified adjustments.  On February 26, 2005, the Company was in compliance
with all financial covenants.

Industrial
Revenue Bonds

In conjunction with the amendment and restatement of
NBP's credit facility, effective December 30, 2004, NBP entered into a
transaction with the City of Dodge City, Kansas (the City), in order to provide
NBP 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 December
2014, and leased the facility to NBP for an identical term under a capital
lease.  The City's bonds were purchased by NBP using proceeds of its term loan
under the amended and restated credit facility.  Because the City has assigned
the lease to the bond trustee for the benefit of NBP as the sole bondholder, NBP,
in effect, controls enforcement of the lease against itself.  As a result of
the capital lease treatment, the facility will remain a component of property,
plant and equipment in NBP's consolidated balance sheet.  As a result of the
legal right of offset, the capital lease obligation and the corresponding bond
investments will be eliminated in consolidation.  The transaction provides NBP
with property tax exemptions for the leased facility, which, after netting
payments to the City and local school district under payment in lieu of tax
agreements, result in an annual property tax savings of approximately 25%.  The
facility remains subject to a prior mortgage and security interest in favor of
the lenders under the senior credit facility.  Additional revenue bonds may be
issued to cover the costs of certain improvements to this facility.  The total
amount of revenue bonds authorized for issuance is $120.0 million.

Utilities
Commitment

Effective December 30, 2004, NBP finalized an agreement
with the City of Dodge City, Kansas, whereby in consideration of certain
improvements made to the City water and wastewater systems, NBP has committed
to make a series of service charge payments totaling $19.3 million over a 20
year period.  Payments under the commitment will be $0.8 million in fiscal year
2005, $1.2 million in fiscal year 2006, $1.4 million in fiscal year 2007, $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





(9) 
Earnings (Loss) Per Unit

Prior to the conversion from a cooperative to an LLC,
per share data had been omitted because, under the cooperative structure,
earnings of the Company were distributed as patronage dividends to members and
associate members, those who leased delivery rights from shareholders, based on
the level of business conducted with the Company as opposed to a common
shareholder's proportionate share of underlying equity in the Company.  Under
the LLC structure, earnings of the Company are to be distributed to unitholders
based on their proportionate share of underlying equity, and, as a result,
earnings (loss) per unit (EPU) has been presented in the accompanying
Consolidated Statement of Operations, along with the pro forma amounts for the
prior year for the same fiscal periods assuming the conversion to an LLC was
retroactively applied.

Basic EPU excludes dilution and is computed by
dividing income (loss) available to unitholders by the weighted-average number
of units outstanding for the period.  Diluted EPU reflects the potential
dilution that could occur if unit options were exercised or converted into
units.   Options to purchase 20,000 units for $55 were issued and outstanding
for both periods.  Options were excluded from the 2005 diluted EPU calculations
as the effect of their inclusion would have been anti-dilutive on the loss per
unit calculation.



(In thousands, except unit and per unit data)
		
		13 weeks
		ended February 26, 2005
		
		26 weeks
		ended February 26, 2005
	
			
		
		(Loss)
		(Numerator)
		
		Units
		(Denominator)
		
		Per Unit
		
		Amount
		
		(Loss)
		(Numerator)
		
		Units
		(Denominator)
		
		Per Unit
		
		Amount
	
			Basic loss per unit
		
		
		
		
		
		
		
		
		
		
		
		
		
		
		
		
	
			Loss available to unitholders
		
		$
		(7,453)
		
		691,845
		
		$
		(10.77)
		
		$
		(10,435)
		
		691,845
		
		$
		(15.08)
	
			Effect of dilutive securities - unit options
		
		
		
		
		-
		
		
		
		
		
		
		
		-
		
		
	
			Diluted loss per unit
		
		
		
		
		
		
		
		
		
		
		
		
		
		
		
	
			Loss available to unitholders
		
		
		
		
		
		
		
		
		
		
		
		
		
		
		
	
			including assumed conversion
		
		$
		(7,453)
		
		691,845
		
		$
		(10.77)
		
		$
		(10,435)
		
		691,845
		
		$
		(15.08)
	
			
		
		
		
		
		
		
		
		
		
		
		
		
	
			
		
		
		
		
		
		
		
		
		
		
		
		
	
			
		
		Pro Forma
		13 weeks ended February 28, 2004
		
		Pro Forma
		26 weeks ended February 28, 2004
	
			
		
		Earnings
		(Numerator)
		
		Units
		(Denominator)
		
		Per Unit
		
		Amount
		
		Earnings
		(Numerator)
		
		Units
		(Denominator)
		
		Per Unit
		
		Amount
	
			Basic earnings per unit
		
		
		
		
		
		
		
		
		
		
		
		
	
			Income available to unitholders
		
		$
		225
		
		691,845
		
		$
		0.33
		
		$
		9,832
		
		691,845
		
		$
		14.21
	
			Effect of dilutive securities - unit options
		
		
		
		12,727
		
		
		
		
		
		12,727
		
		
	
			Diluted earnings per unit
		
		
		
		
		
		
		
		
		
		
		
		
	
			Income available to unitholders
		
		
		
		
		
		
		
		
		
		
		
		
	
			including assumed conversion
		
		$
		225
		
		704,572
		
		$
		0.32
		
		$
		9,832
		
		704,572
		
		$
		13.95




10





Item 2.  Management's
Discussion and Analysis of Financial Condition and Results of Operations.

Disclosure
Regarding Forward-Looking Statements

This report contains
"forward-looking statements," which are subject to a number of risks and
uncertainties, many of which are beyond our control. Forward-looking statements
are typically identified by the words "believe," "expect," "anticipate,"
"intend," "estimate" and similar expressions. Actual results could differ
materially from those contemplated by these forward-looking statements as a
result of many factors, including economic conditions generally and in our principal
markets, the availability and prices of live cattle and commodities, food
safety, livestock disease, competitive practices and consolidation in the
cattle production and processing industries, actions of domestic or foreign
governments, hedging risk, changes in interest rates and foreign currency
exchange rates, consumer demand and preferences, the cost of compliance with
environmental and health laws, loss of key customers, loss of key employees,
labor relations and consolidation among our customers. In light of these risks
and uncertainties, there can be no assurance that the results and events
contemplated by the forward-looking information contained in this report will
in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking
statements. We do not undertake any obligation to update or revise any
forward-looking statements. All subsequent written or oral forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified 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 filed
with the Securities and Exchange Commission on November 26, 2004 for other important factors that could cause actual results to differ materially from those
in any such forward-looking statements, and which should be read in conjunction
with this report.

Industry
Outlook

Recent
legal developments have increased the uncertainty of the timing of the border
opening for importation of live cattle to the U.S. from Canada.  Also, while there is a framework of an agreement for the resumption of trade with Japan, it appears trade will not resume for some time.  Currently live weights of
cattle being slaughtered are considerably higher than last year, implying supplies
of cattle in the near term will be larger; however, until international market
access is restored and live cattle are permitted from Canada, margins can be expected to be negatively impacted.

Recent
Developments

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

The closure of U.S. borders to the importation of
Canadian feeder and fattened (ready for slaughter) animals, which occurred in
May 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 has
operated at a price disadvantage during the ban on importation of Canadian
livestock.   This continued closure of the U.S. border to Canadian livestock
has 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 boxed
beef prices.

On December 23, 2003, it was announced by the United
States Department of Agriculture (USDA) that a single Holstein dairy cow was
discovered in the state of Washington to have tested positive for BSE.  The
origin 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 to
the importation of edible beef products from the United States.  Certain
by-products have been classified as Specified Risk materials (SRMs), and have
been banned from use in feedstocks and the human food chain.  Some of these
products previously enjoyed a market in foreign countries. In FYE 2004, NBP's
total export sales were approximately 10% of total net sales.

11





During the second quarter of FYE 2004, NBP recorded
charges to sales and cost of sales totaling approximately $18.8 million
due to the market impacts of the closure of international borders as a result
of the BSE discovery in late December 2003.

On December 29, 2004, the USDA announced it had
established 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 with
effective BSE prevention and detection measures.  Prior to being able to import
to the U.S., each country must undergo a thorough risk assessment to be
recognized as a "minimal-risk region."  Canada will be the first country
recognized as a minimal-risk region and, as such, will be eligible to export to
the U.S. live cattle under 30 months of age (subject to certain restrictions),
as well as certain other animals and products.  The final rule was published in
the January 4, 2005 Federal Register and was to become effective March 7, 2005 unless delayed by litigation, legislation or other reasons.

On January 2, 2005, the Canadian Food Inspection
Agency 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 1997
feed ban.  On January 3, 2005, the USDA issued a statement expressing
confidence 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 rulemaking
process to determine Canada's status as a minimal-risk region included
consideration of the possibility that Canada could experience additional cases
of BSE.

On March 2, 2005, the U.S. District Court in Billings, Montana granted a preliminary injunction to delay the implementation of USDA's
minimal-risk regions rule, temporarily blocking the opening of the Canadian
border to the importation of live cattle under 30 months of age into the U.S.  On March 17, 2005, the U.S. Department of
Justice, on behalf of the USDA, filed a request with the U.S. Court of Appeals
for the Ninth Circuit requesting that the court overturn the decision issued by
the U.S. District Court in Montana which would re-establish trade with Canada for beef products and live cattle under 30 months of age.  These actions introduce
significant uncertainty regarding the future timing and nature of trade in live
cattle and beef products between the U.S. and Canada.

Announcements of inconclusive, preliminary test results
for BSE can be expected from time to time as a result of the sensitivity of the
new screening regime.  The impact on the market created by such uncertainty is
not possible to predict.

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

Results
of Operations

Thirteen weeks ended February 26, 2005 compared to thirteen weeks ended
 February 28, 2004

General. 
Net loss for the thirteen weeks ended February 26, 2005 was $7.5 million compared to net income of $0.2 million for the thirteen weeks ended February 28, 2004, a decrease of $7.7 million.  Sales were higher in the thirteen weeks ended February 26, 2005 than those of the prior year period due to an increase in the number of
cattle processed of approximately 5.5%. The loss of export markets due to BSE,
the smaller supplies of cattle as a result of the continued closure of the
Canadian border to live cattle imports and the on-going importation of boxed
beef products to the U.S. from Canada continues to pressure beef margins.

12





Total costs and expenses as a percent of sales were 100.3%
for the thirteen weeks ended February 26, 2005 compared to 99.3% for the thirteen
weeks ended February 28, 2004.  Costs were higher due to a 5.5% increase in the
number of cattle processed from 2004, combined with higher live cattle prices
and higher average live weights.  Operating income decreased $9.4 million due
to live cattle costs rising at a higher rate than boxed beef and beef product
prices, and to a continuing unfavorable pricing environment for products
traditionally marketed outside the U.S.

Net Sales. 
Net sales were $1,026.7 million for the thirteen weeks ended February 26, 2005 compared to $932.0 million for the thirteen weeks ended February 28, 2004, an increase of $94.7 million or 10.2%.  The increase resulted primarily from an increase
in boxed beef and beef product prices of approximately 3.1% combined with an
approximate 5.5% increase in the number of cattle processed in 2005.  Boxed
beef and beef product prices continued to be pressured by the loss of key
export markets closed to U.S. beef products due to BSE, as well as the
continued importation of boxed beef products to the U.S. from Canada.

Cost
of Sales.  Cost of sales was $1,014.6 million for the thirteen weeks ended February 26, 2005 compared to $912.6 million for the thirteen weeks ended February 28, 2004, an increase of $102.0 million or 11.2%.  The increase resulted
primarily from an increase in the number of cattle processed from 2004 of 5.5%,
combined with higher average live weights and higher live cattle prices.

Selling,
General and Administrative Expenses.  Selling, general and administrative
expenses were $9.3 million for the thirteen weeks ended February 26, 2005 compared to $8.3 million for the thirteen weeks ended February 28, 2004, an increase of $1.0 million or 12.0%.  The current year reflects an increase in payroll
and related expenses of $0.5 million and an increase in professional services of
approximately $0.4 million due to additional services required for public
reporting.

Depreciation
and Amortization Expense.  Depreciation and amortization expenses were $6.1
million for the thirteen weeks ended February 26, 2005 compared to $5.0 million for the thirteen weeks ended February 28, 2004, an increase of $1.1 million or
22.0%.  Depreciation expense was reduced by approximately $0.9 million in the
thirteen weeks ended February 28, 2004 as a result of a catch-up adjustment for
estimates that had been utilized in the calculations of depreciation expense
prior to the thirteen weeks ended February 28, 2004 in connection with the
step-up in values of property, plant and equipment relative to assets acquired
when we acquired a controlling interest in Farmland National Beef Packing
Company, L.P. on August 6, 2003 and formed National Beef Packing Company, LLC.

Operating Loss/Income.  Operating loss was $3.2 million for the thirteen
weeks ended February 26, 2005 compared to operating income of $6.2 million for
the thirteen weeks ended February 28, 2004, a decrease of $9.4 million.  The
decrease resulted from higher live cattle prices, which was partially offset by
higher boxed beef and beef product prices.  The continued closure of the U.S.
border to Canadian livestock and the corresponding reduction in the number of
live cattle available for processing, along with the loss of key export markets
and the continued importation of boxed beef products to the U.S. from Canada
has resulted in compressed margins in the U.S. beef packing industry.  Operating
(loss) income, as a percentage of net sales, was (0.3%) for the thirteen weeks
ended February 26, 2005 and 0.7% for the thirteen weeks ended February 28, 2004.

Interest
Expense.  Interest expense was $6.9 million for the thirteen weeks ended February 26, 2005 compared to $6.1 million for the thirteen weeks ended February 28, 2004, an increase of $0.8 million or 13.1%.  The increase was due primarily to higher
interest rates in the thirteen weeks ended February 26, 2005 as compared to the same period in fiscal 2004.

Other, net. 
Other, net non-operating expense was $3.0 million for the thirteen weeks ended February 26, 2005 compared to non-operating income of $1.4 million for the thirteen weeks
ended February 28, 2004, a decrease of $4.4 million.  The thirteen weeks ended
February 26, 2005 included $3.2 million in expense for the write-off of
unamortized loan costs associated with amending and restating NBP's existing
senior credit facility, and the same period in fiscal 2004 included a $1.2
million gain received through the demutualization of a company which held
annuities for NBP employees.

13

---



Income Tax Expense.  Income tax expense was $0.6 million for both the thirteen weeks
ended February 26, 2005 and for the thirteen weeks ended February 28, 2004.

Twenty-six weeks ended February 26, 2005 compared to twenty-six weeks
ended February 28, 2004

General. 
Net loss for the twenty-six weeks ended February 26, 2005 was $10.4 million compared to net income of $9.8 million for the twenty-six weeks ended February 28, 2004, a decrease of $20.2 million.  Sales were higher in the twenty-six weeks
ended February 26, 2005 than those of the prior year period due to an increase
in the number of cattle processed of approximately 5.7% combined with higher
average weights. The loss of export markets due to BSE, the smaller supplies of
cattle as a result of the continued closure of the Canadian border to live
cattle imports and the on-going importation of boxed beef products to the U.S. from Canada continues to pressure beef margins.

Total costs and expenses as a percent of sales were 100.1%
for the twenty-six weeks ended February 26, 2005 compared to 98.4% for the
twenty-six weeks ended February 28, 2004.  Costs were higher due to a 5.7 %
increase in the number of cattle processed from 2004, combined with higher
average weights, partially offset by lower average live cattle prices.  Operating
income decreased $32.8 million due to live cattle costs rising at a higher rate
than boxed beef and beef product prices, and to a continuing unfavorable
pricing environment for products traditionally marketed outside the U.S.

Net Sales. 
Net sales were $2,077.4 million for the twenty-six weeks ended February 26, 2005 compared to $1,990.3 million for the twenty-six weeks ended February 28, 2004, an increase of $87.1 million or 4.4%.  The increase resulted primarily
from an increase in the number of cattle processed from 2004 at higher average
weights, partially offset by a decrease in boxed beef and beef product prices
of approximately 2.9%.  Boxed beef and beef product prices continued to be
pressured by the loss of key export markets closed to U.S. beef products due to BSE as well as the continued flow of boxed beef products from Canada to the U.S.

Cost
of Sales.  Cost of sales was $2,048.8 million for the twenty-six weeks
ended February 26, 2005 compared to $1,931.4 million for the twenty-six weeks
ended February 28, 2004, an increase of $117.4 million or 6.1%.  The increase
resulted primarily from an increase in the number of cattle processed from 2004
of 5.7%, combined with higher average live weights, partially offset by lower
live cattle prices.

Selling,
General and Administrative Expenses.  Selling, general and administrative
expenses were $18.3 million for the twenty-six weeks ended February 26, 2005 compared to $16.2 million for the twenty-six weeks ended February 28, 2004, an increase of $2.1 million or 13.0%.  The current year reflects an increase of approximately
$1.1 million in payroll and related expenses, an increase of approximately $0.5
million in professional services (partially due to additional services required
for public reporting) and an expense for state franchise taxes of approximately
$0.3 million.

Depreciation
and Amortization Expense.  Depreciation and amortization expenses were $12.1
million for the twenty-six weeks ended February 26, 2005 compared to $11.6 million for the twenty-six weeks ended February 28, 2004, an increase of $0.5 million or 4.3%.  The increase is attributable to assets being placed into service
at our processing plants at the end of fiscal year 2004.

Operating Loss/Income.  Operating loss was $1.7 million for the twenty-six
weeks ended February 26, 2005 compared to operating income of $31.1 million for
the twenty-six weeks ended February 28, 2004, a decrease of $32.8 million or 105.5%. 
The decrease resulted from the lower boxed beef and beef product prices due in
part to the loss of key export markets closed to U.S. beef products due to
BSE.  The continued closure of the U.S. border to Canadian livestock and the
corresponding reduction in the number of live cattle available for processing,
along with the loss of key export markets and continued flow of boxed beef
products from Canada to the U.S. has resulted in compressed margins in the U.S.
beef packing industry.  Operating (loss) income, as a percentage of net sales,
was (0.1%) for the twenty-six weeks ended February 26, 2005 and 1.6% for the twenty-six weeks ended February 28, 2004.

14

---



Interest
Expense.  Interest expense was $13.8 million for the twenty-six weeks ended
 February 26, 2005 compared to $12.6 million for the twenty-six weeks ended February 28, 2004, an increase of $1.2 million or 9.5%.  The increase was due primarily to
higher interest rates in the twenty-six weeks ended February 26, 2005 as compared to the same period in fiscal 2004.

Other, net. 
Other, net non-operating expense was $2.5 million for the twenty-six weeks
ended February 26, 2005 compared to non-operating income of $1.8 million for
the twenty-six weeks ended February 28, 2004, a decrease of $4.3 million.  The
twenty-six weeks ended February 26, 2005 included $3.2 million in expense for
the write-off of unamortized loan costs associated with amending and restating
NBP's existing senior credit facility, and the same period in fiscal 2004
included a $1.2 million gain received through the demutualization of a company
which held annuities for NBP employees.

Income
Tax Expense.  Income tax expense of $1.1 million for the twenty-six weeks
ended February 26, 2005 compared to $1.4 million for the twenty-six weeks ended
 February 28, 2004, a decrease of $0.3 million or 21.4%.  The decrease was
primarily due to the conversion from a cooperative to an LLC, offset by increased
tax expense as a result of higher income for the period for National Carriers,
Inc. and the associated income tax expense on income from that entity, which is
organized as a C Corporation.

Liquidity
and Capital Resources

As of February 26, 2005, we had net working capital of
$180.9 million, which included cash and cash equivalents of $64.0 million and $0.4
million in partner and member payables. At August 28, 2004, we had net working capital of $179.9 million, which included cash and cash equivalents of
$43.6 million and $3.1 million in partner and member payables. Our primary
sources of liquidity are cash flows from operations and available borrowings
under our amended credit facility.

As of February 26, 2005, we had $353.6 million of
long-term debt, of which $1.1 million was classified as a current liability. As
of February 26, 2005, there were outstanding borrowings of $53.0 million,
outstanding letters of credit of $41.6 million and available borrowings of $45.4
million under our $140.0 million amended and restated credit facility. Cash
flow from operations and borrowings under our amended credit facility have
funded our working capital requirements, capital expenditures and other general
corporate purposes.  We were in compliance with all of our financial covenants
under our credit facilities as of February 26, 2005.

In addition to outstanding borrowings under our
amended and restated credit facility, we had outstanding borrowings under
industrial revenue bonds of $13.8 million, senior notes of $160.0 million, term
loans of $126.7 million and capital leases and other obligations of $0.02
million as of February 26, 2005.

Amended
Senior Credit Facility

Effective December 30, 2004, NBP amended and restated its existing senior credit facility with a consortium of banks. The facility
now 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 that
is subject to certain borrowing base limitations.  The amendment and
restatement 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 or
Revolving-Debt Arrangements.  In accordance with that guidance, a portion
of the unamortized loan costs of approximately $2.6 million from the previous
credit facility as well as additional finance and legal charges associated with
the new amended and restated credit facility of approximately $0.6 million were
recorded in Other, net in the Consolidated Statement of Operations during the
second quarter of fiscal year 2005.

The borrowings under the revolving loan are available for
NBP's working capital requirements, capital expenditures and other general
corporate purposes.  The amended and restated credit facility is secured by a
first priority lien on substantially all of NBP's assets.  The principal amount
outstanding under the term loan is due and payable in equal quarterly
installments 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.

15

---

NBP's amended and restated credit facility contains
covenants that limit its ability to incur additional indebtedness, sell or
dispose of assets, pay certain dividends and prepay or amend certain
indebtedness among other matters.  The amended and restated credit facility
also contains a provision for a conversion to more favorable interest rates and
more 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)
plus an applicable margin or a LIBOR rate plus an applicable margin.  As of February 26, 2005, the interest rate for the term loan was equal to LIBOR plus 275 basis
points and the interest rate for the revolving loan was equal to LIBOR plus 250
basis points.  After the Conversion Date the interest rate for the term loan
and the revolving loan is determined by reference to a matrix of rates keyed to
NBP's funded debt to EBITDA (as defined in the credit agreement) ratio.

The amended and restated credit facility also imposes certain
financial covenants.  From December 30, 2004 until the Conversion Date, NBP is
required to  (i) have as of the end of each fiscal quarter a minimum
four-quarter rolling EBITDA of $50.0 million and (ii) maintain at all
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 to
covenants imposing a specified maximum funded debt to EBITDA ratio, a maximum
senior secured funded debt to EBITDA ratio, a minimum four-quarter rolling
EBITDA and a minimum four-quarter rolling debt service coverage ratio.  In
addition, NBP's annual net capital expenditures are limited to amounts ranging
from $32 million in fiscal 2005 to $40 million in fiscal 2008 and fiscal years
thereafter.  As defined in the amended credit facility, EBITDA contains
specified adjustments.  On February 26, 2005, the Company was in compliance
with all financial covenants.

Industrial
Revenue Bonds

In conjunction with the amendment and restatement of NBP's
credit facility, effective December 30, 2004, NBP entered into a
transaction with the City of Dodge City, Kansas (the City), in order to provide
NBP 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 December 2014,
and leased the facility to NBP for an identical term under a capital lease.  The
City's bonds were purchased by NBP using proceeds of its term loan under the
amended and restated credit facility.  Because the City has assigned the lease
to the bond trustee for the benefit of NBP as the sole bondholder, NBP, in
effect, controls enforcement of the lease against itself.  As a result of the
capital lease treatment, the facility will remain a component of property,
plant and equipment in NBP's consolidated balance sheet.  As a result of the
legal right of offset, the capital lease obligation and the corresponding bond
investments will be eliminated in consolidation.  The transaction provides NBP
with property tax exemptions for the leased facility, which, after netting
payments to the City and local school district under payment in lieu of tax
agreements, result in an annual property tax savings of approximately 25%.  The
facility remains subject to a prior mortgage and security interest in favor of
the lenders under the senior credit facility.  Additional revenue bonds may be
issued to cover the costs of certain improvements to this facility.  The total
amount of revenue bonds authorized for issuance is $120.0 million.

Capital spending through February 26, 2005 was approximately $10.0 million.  NBP expects to spend somewhat less than $30 million in
total on capital expenditures during fiscal year 2005, primarily for plant
expansion, renewals and improvements.

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

16

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Operating
Activities

Net
cash provided by operating activities in the twenty-six weeks ended February 26, 2005 was $20.4 million compared to $24.1 million in the twenty-six weeks
ended February 28, 2004, primarily the result of a decrease in net earnings in
the current year period, offset by a decrease in working capital requirements.

Investing
Activities

Net
cash used in investing activities was $9.2 million in the twenty-six weeks
ended February 26, 2005 compared to $14.6 million in the twenty-six weeks ended
 February 28, 2004.  This decrease in cash used was primarily attributable to $5.2
million less in expenditures for property, plant and equipment in the current
year.

Financing
Activities

Net
cash provided by financing activities was $9.2 million in the twenty-six weeks
ended February 26, 2005 compared to net cash used in financing activities of $14.9
million in the twenty-six weeks ended February 28, 2004.  The change was attributed to a $22.9 million decrease in cash distributions for member taxes and a $7.0
million increase in the overdraft balance, offset by a $9.9 million decrease in
revolving credit borrowings.

Utilities
Commitment

Effective December 30, 2004, NBP finalized an
agreement with the City of Dodge City, Kansas, whereby in consideration of
certain improvements made to the City water and wastewater systems, NBP has
committed to make a series of service charge payments totaling $19.3 million
over a 20 year period.  Payments under the commitment will be $0.8 million in
fiscal year 2005, $1.2 million in fiscal year 2006, $1.4 million in fiscal year
2007, $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.

Item 3. Quantitative and
Qualitative Disclosures About Market Risk.

The principal market risks affecting our business are
exposure to changes in prices for commodities, such as livestock and boxed
beef, and interest rate risk.

Commodities.NBP
uses various raw materials, many of which are commodities. Raw materials are
generally available from several different sources, and NBP presently believes
that it can obtain them as needed.  Commodities are subject to price
fluctuations that may create price risk. When appropriate, NBP may hedge
commodities in order to mitigate this price risk. While this may tend to limit
its ability to participate in gains from commodity price fluctuations, it also
tends to reduce the risk of loss from changes in commodity prices. NBP reflects
commodity contract gains and losses as adjustments to the basis of underlying
commodities purchased; gains or losses are recognized in the statement of
operations as a component of costs of goods sold.

NBP purchases cattle for use in its processing
businesses. When appropriate, it enters into forward purchase contracts at
prices determined prior to the delivery of the cattle. The commodity price risk
associated with these activities can be hedged by selling (or buying) the
underlying 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 price
risk. When appropriate, it enters into forward sales contracts at prices
determined prior to shipment. While this may tend to limit its ability to
participate in gains from commodity price fluctuations, it also tends to reduce
the risk of loss from changes in commodity beef prices. NBP reflects commodity
contract gains and losses as adjustments to the basis of underlying commodities
sold; gains or losses are recognized in the statement of operations as a
component of net sales.

17

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NBP may use futures contracts to reduce exposure
associated with entering into firm commitments to purchase live cattle at
prices determined prior to delivery of the cattle as well as firm commitments
to sell certain beef products at sales prices determined prior to shipment. In
accordance with SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended, NBP accounts for futures contracts and
their related firm commitments at fair value. Most firm commitments are treated
as "normal purchases and sales" and not marked to market.  SFAS No. 133 imposes
extensive recordkeeping requirements to treat a derivative instrument as a
hedge for accounting purposes. Derivatives qualify for treatment as hedges when
there is a high correlation between the change in fair value of the instrument
and the related change in fair value of the underlying commitment. For
derivatives that qualify as effective hedges, the change in fair value has no
net effect on earnings until the hedged transaction affects earnings. For
derivatives that are not designated as hedging instruments, or for the ineffective
portion of a hedging instrument, the change in fair value does affect current
period net earnings.

While NBP management believes each of these
instruments help mitigate various market risks, they are not designated and
accounted for as hedges under SFAS No. 133 as a result of the extensive
recordkeeping requirements of this statement. Accordingly, the gains and losses
associated with the change in fair value of the instrument and the offsetting
gains and losses associated with changes in the market value of certain of the
firm commitments related to the futures contracts are recorded to income and
expense in the period of change.

The
following table describes the number of futures positions and the fair value of
those positions and related firm commitments at February 26, 2005 and August 28, 2004.  A position in live cattle consists of 40,000 pounds.  Firm commitments
for purchase are for live cattle and firm commitments for sales are for boxed
beef (dollars in thousands).

Positions expiringFebruary 26, 2005
  
  within 1 year
  
  Fair ValueLive CattleFutures long
  
  -
  
  $
  -Futures short
  
  825
  
  460Firm commitments purchase
  
  -
  
  (455)Firm commitments sale
  
  -
  
  -August 28, 2004Live CattleFutures long
  
  -
  
  -Futures short
  
  55
  
  $
  96Firm 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 we
manage primarily through our regular financing activities. We generally
maintain limited investments in cash and cash equivalents.

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

The
interest rate exchange agreement, which effectively resulted in converting
variable-rate debt into fixed-rate debt, on USPB's CoBank term loan, terminated
on January 3, 2005.  As a result, USPB is now exposed to fluctuations in
interest rates.  The interest rate exchange agreement fixed the 90 day LIBOR
index at 6.153%.  At February 26, 2005, the 90 day LIBOR index was 2.56%.

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Item 4.  Controls and Procedures.

We maintain a
system of controls and procedures designed to provide reasonable assurance as
to the reliability of the consolidated financial statements and other
disclosures included in this report, as well as to safeguard assets from
unauthorized use or disposition. We evaluated the effectiveness of the design
and operation of our disclosure controls and procedures as defined in the
Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) under
supervision and with the participation of management, including our Chief
Executive Officer and Principal Financial and Accounting Officer. Based upon
that evaluation, as of the end of the period covered by this Quarterly Report
on Form 10-Q, our Chief Executive Officer and Principal Financial and
Accounting Officer concluded that our disclosure controls and procedures were
effective in alerting them, in a timely manner, to material information
required to be included in our periodic Securities and Exchange Commission
filings.  There have been no changes in our internal controls over financial
reporting during the thirteen weeks ended February 26, 2005 that have
materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.  The design of any system of
controls and procedures is based in part upon certain assumptions about the
likelihood of future events.



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PART
II. OTHER INFORMATION

Item 1. Legal Proceedings.

For information
regarding legal proceedings, see Note 6, "Contingencies" to our consolidated
financial statements included in Part I- Item 1 of this Form 10-Q.

Item 2. Unregistered Sales
of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon
Senior Securities.

None.

Item 4. Submission of
Matters to a Vote of Security Holders.

The Annual Meeting of members of USPB was held on January 18, 2005. Other than approval of the minutes from the previous annual
meeting, the only proposal presented for member consideration at the Annual
Meeting was the election of three (3) directors to serve for three-year terms
expiring after the 2007 fiscal year.  The three nominees who stood for election
to the Board of Directors were incumbent directors Mark Gardiner and Douglas A. Laue and new candidate Jerry Bohn.  Biographical information regarding Mr.
Gardiner and Mr. Laue has previously been included in the Company's filings
with the Securities and Exchange Commission.

Mr.
Bohn, Pratt, Kansas. Mr. Bohn is a graduate of Kansas State University with a Bachelor's degree in Animal Sciences and Industry.  Mr. Bohn has served
as the General Manager of Pratt Feeders since 1989. Pratt Feeders has a
one-time capacity of 115,000 head in four feedlots in Kansas and Oklahoma. In this capacity he oversees more than 100 employees.  Mr. Bohn also owns and
manages a 5,000 to 6,000 head cattle operation which includes grazing and
finishing cattle. Mr. Bohn previously was employed as Director of Market
Analysis for Cattle-Fax, an industry market analysis firm. He has served as
President of the Kansas Livestock Association. He has been a board member of
the Kansas Beef Council, the National Cattlemen's Beef Association (NCBA) and
Feeders Advantage, a private animal health product distribution company. Mr.
Bohn has also served on the NCBA's Executive Committee and as Chairman of
NCBA's Live Cattle Marketing Committee.

At the Annual
Meeting, USPB's members elected each of the nominees named above to serve as
directors on the Board of Directors for a term that will expire after fiscal
year 2007.  The election of the slate of nominees was by a majority of the
members present and voting at the Annual Meeting, expressed by a "voice" vote
on the floor of the Annual Meeting.  In light of the voice vote, written balloting
was not conducted, so the number of votes for and against the particular
nominees is not available.

Item 5. Other Information.

None.

Item 6. Exhibits.

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

10.1
			
			Aircraft Lease dated as of December 9, 2004 by and among John R. Miller Enterprises, L.L.C. and National Beef Packing
  Company, LLC (incorporated by reference to Exhibit 10.1 to NBP's Current
  Report on Form 8-K filed with the Commission on December 9, 2004).10.2
			
			Fourth Amended and Restated
  Credit Agreement dated as of December 29, 2004 by and between National Beef
  Packing Company, LLC and certain agents, lenders and issuers (incorporated by
  reference to Exhibit 10.1 to NBP's Current Report on Form 8-K filed with the
  Commission on January 6, 2005).


20

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10.3(a)
  
  
  Lease dated as of December 1,
  2004 between City of Dodge City, Kansas and National Beef Packing Company, LLC
  securing $102,300,000 City of Dodge City, Kansas Industrial Development
  Revenue Bonds, Series 2004 (National Beef Packing Company, LLC Project) (incorporated
  by reference to Exhibit 10.2 to NBP's Current Report on Form 8-K filed with
  the Commission on January 6, 2005).10.3(b)
  
  
  Trust Indenture dated as of
  December 1, 2004 between City of Dodge City, Kansas and Commerce Bank, N.A.,
  as trustee, securing $102,300,000 City of Dodge City, Kansas Industrial
  Development Revenue Bonds, Series 2004 (National Beef Packing Company, LLC
  Project) (incorporated by reference to Exhibit 10.3 to NBP's Current Report
  on Form 8-K filed with the Commission on January 6, 2005).31.1
  
  
  Certification of the Chief
  Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.31.2
  
  
  Certification of the 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.


21

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SIGNATURES

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



U.S. Premium Beef, LLCBy:
  
  /s/ Steven D. HuntSteven D. HuntChief Executive Officer and Manager
	(Principal Executive Officer)


By:
  
  /s/ Danielle ImelDanielle ImelTreasurer
	(Principal Financial and Accounting Officer)


Date: April 12, 2005

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