UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Form~~FORM 10-Q

(Mark one)

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

For the quarterly period ended ~~November 26, 2005~~May 27, 2006


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

		For the transition period from ~~________~~_____________ to ~~_________.~~_____________.

Commission file number 333-115164

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

DELAWARE		20-1576986
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)		~~(I.R.S. employer~~ ~~identification number)~~Identification No.)

12200 North Ambassador Drive
Kansas City,, MO 64163

(Address of principal executive offices)

Telephone: (866) 877-2525
(~~Registrant's~~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 xþ Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, ~~(as defined~~or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange ~~Act). Yes~~ Act.

Large Accelerated Filero No Accelerated Filerx o Non-Accelerated Filerþ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Noxþ

The ~~Registrant's~~registrant’s equity is not traded on an exchange or in any public market. As of ~~January 3,~~June 24, 2006, there were ~~691,845~~736,005 Class A units and ~~691,845~~736,005 Class B units outstanding.

~~TABLE OF CONTENTS~~

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	Page No.

~~Item 1.~~	~~Financial Statements.~~	1

Item 1.	Financial Statements	1

Item 2.	~~Management's~~Management’s Discussion and Analysis of Financial Condition	10
	and Results of ~~Operations.~~Operations	9

Item 3.	Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk	13 17

Item 4.	Controls and ~~Procedures.~~Procedures	15 18


PART II.	OTHER INFORMATION

Item 1.	Legal ~~Proceedings.~~Proceedings	15 18

Item 1A.	Risk Factors	15 19

Item 2.	Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds	15 19

Item 3.	Defaults Upon Senior ~~Securities.~~Securities	15 19

Item 4.	Submission of Matters to a Vote of Security ~~Holders.~~Holders	15 19

Item 5.	Other ~~Information.~~Information	16 19

Item 6.	~~Exhibits.~~ Exhibits	16 19

	~~Signatures.~~Signatures	17 21

Unless the context indicates or otherwise requires, the terms ~~"the Company"~~“the Company”, ~~"we"~~“we”, ~~"our"~~“our” and ~~"us"~~“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"~~“NBP” refers to National Beef Packing Company, LLC (formerly known as Farmland National Beef Packing Company, LP), a Delaware limited liability company, and ~~"USPB"~~“USPB” refers to U.S. Premium Beef, LLC (formerly known U.S. Premium Beef, Ltd.) prior to consolidation.

~~iii~~

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES
Consolidated Balance Sheets

(in thousands)

November 26, August 27,
Assets 2005 2005

(unaudited)

Current assets:
     Cash and cash equivalents $ 47,884 $ 54,428
     Accounts receivable, less allowance for returns and doubtful accounts
of $3,852 and $3,903 in fiscal years 2006 and 2005, respectively 170,041 170,854
     Due from affiliates 2,567 2,979
     Other receivables 3,577 3,385
    Inventory 98,691 85,426
     Other current assets 10,962 9,920
Total current assets 333,722 326,992
Property, plant and equipment, at cost 267,382 258,493
     Less accumulated depreciation (49,249) (43,331)
Net property, plant and equipment 218,133 215,162
Goodwill 78,858 78,858
Other intangible assets, net of accumulated amortization
     of $3,738 and $3,335 in fiscal years 2006 and 2005, respectively 28,023 28,426
Other assets 5,900 6,710
Total assets $ 664,636 $ 656,148

Liabilities and Capital Shares and Equities
Current liabilities:
     Current installments of long-term debt $ 1,808 $ 1,030
     Cattle purchases payable 64,805 54,394
     Accounts payable 46,372 42,514
     Due to affiliates 616 1,533
     Accrued compensation and benefits 17,387 22,168
     Accrued insurance 14,050 15,528
     Other accrued expenses and liabilities 13,156 9,389
     Distributions payable 286 1,865
Total current liabilities 158,480 148,421
Long-term liabilities:
     Long-term debt, excluding current installments 325,896 313,998
     Other liabilities 4,744 4,738
Total long-term liabilities 330,640 318,736
Total liabilities 489,120 467,157
Minority interest in National Beef Packing Company and Kansas City Steak, LLC 59,112 64,971
Capital shares and equities:
     Members' capital, 691,845 Class A units and 691,845 Class B units
authorized, issued and outstanding 65,726 73,343
     Patronage notices 50,642 50,642
     Accumulated other comprehensive income 36 35
Total capital shares and equities 116,404 124,020
Total liabilities and capital shares and equities $ 664,636 $ 656,148

See accompanying notes to consolidated financial statements.

		May 27,		August 27,
Assets		2006		2005
		(unaudited)
Current assets:
Cash and cash equivalents		$	49,521	$	54,428
Accounts receivable, less allowance for returns and doubtful accounts
	of $3,690 and $3,903 in fiscal years 2006 and 2005, respectively		153,356		170,854
Due from affiliates			1,343		2,979
Other receivables			7,253		3,385
Inventory			115,027		85,426
Other current assets			11,410		9,920
	Total current assets		337,910		326,992
Property, plant and equipment, at cost			285,632		258,493
Less accumulated depreciation			(62,201)		(43,331)
	Net property, plant and equipment		223,431		215,162
Goodwill			78,858		78,858
Other intangible assets, net of accumulated amortization
of $4,612 and $3,335 in fiscal years 2006 and 2005, respectively			27,824		28,426
Other assets			6,194		6,710
	Total assets	$	674,217	$	656,148

Liabilities and Capital Shares and Equities
Current liabilities:
Current installments of long-term debt		$	2,957	$	1,030
Cattle purchases payable			58,371		54,394
Accounts payable			44,446		42,514
Due to affiliates			455		1,533
Accrued compensation and benefits			20,940		22,168
Accrued insurance			13,777		15,528
Other accrued expenses and liabilities			16,948		9,389
Distributions payable			1,909		1,865
	Total current liabilities		159,803		148,421
Long-term liabilities:
Long-term debt, excluding current installments			326,506		313,998
Other liabilities			4,588		4,738
	Total long-term liabilities		331,094		318,736
	Total liabilities		490,897		467,157
Minority interest in National Beef Packing Company, LLC and Kansas City Steak, LLC			62,409		64,971
Capital shares and equities:
Members' capital, 736,005 linked Class A and Class B units authorized,
	691,845 linked Class A and Class B units issued and outstanding		70,215		73,343
Patronage notices			50,642		50,642
Accumulated other comprehensive income			54		35
	Total capital shares and equities		120,911		124,020
	Total liabilities and capital shares and equities	$	674,217	$	656,148

See accompanying notes to consolidated financial statements.

U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES
Consolidated Statements of Operations
(in ~~thousands, except per unit data)~~thousands)

	13 weeks ended		13 weeks ended		13 weeks ended		13 weeks ended		39 weeks ended		39 weeks ended
	November 26, 2005		November 27, 2004		May 27, 2006		May 28, 2005		May 27, 2006		May 28, 2005
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)

Net sales	$	1,095,738	$	1,050,720	$	1,134,514	$	1,126,574	$	3,310,278	$	3,204,021

Costs and expenses:
Cost of sales		1,084,545		1,034,189		1,085,946		1,082,875		3,241,210		3,131,662
Selling, general and administrative expenses		9,390		8,633		9,980		8,953		28,575		26,505
Depreciation and amortization		6,595		6,038		7,095		6,142		20,569		18,231

Total costs and expenses		1,100,530		1,048,860		1,103,021		1,097,970		3,290,354		3,176,398

Operating (loss) income		(4,792)		1,860
Operating income						31,493		28,604		19,924		27,623

Other income (expense):
Interest income		258		145		317		204		867		506
Interest expense		(7,373)		(7,213)		(8,040)		(7,330)		(23,210)		(21,793)
Minority owner's interest in net loss
Minority owners' interest in net (income) loss
of National Beef Packing Co., LLC		5,606		2,382		(11,617)		(9,867)		644		(1,087)
Minority owners' interest in net income
of Kansas City Steak, LLC		(14)		(54)
Minority owners' interest in net (income)
loss of Kansas City Steak, LLC						(52)		55		(120)		(156)
Equity in loss of aLF Ventures, LLC		(47)		(122)		(39)		(128)		(119)		(523)
Interest rate exchange agreement		-		78		-		-		-		105
Other, net		504		480		718		402		1,962		(2,074)

Loss before taxes		(5,858)		(2,444)
Income (loss) before taxes						12,780		11,940		(52)		2,601

Income tax expense		(543)		(538)
Income tax benefit (expense)						128		(843)		(1,048)		(1,939)

Net loss	$	(6,401)	$	(2,982)
Net income (loss)					$	12,908	$	11,097	$	(1,100)	$	662


Net loss per Class A and Class B linked unit:
Net income (loss) per linked unit:
Basic	$	(9.25)	$	(4.31)	$	18.66	$	16.04	$	(1.59)	$	0.96
Diluted	$	(9.25)	$	(4.31)	$	18.33	$	15.74	$	(1.59)	$	0.94

Outstanding weighted-average Class A and Class B linked units:
Outstanding weighted-average Class A and Class B units:
Basic		691,845		691,845		691,845		691,845		691,845		691,845
Diluted		691,845		691,845		704,016		705,113		691,845		705,113

See accompanying notes to consolidated financial statements.

U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)

	13 weeks ended		13 weeks ended		39 weeks ended		39 weeks ended
	November 26, 2005		November 27, 2004		May 27, 2006		May 28, 2005
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Cash flows from operating activities:
Net loss	$	(6,401)	$	(2,982)
Adjustments to reconcile net loss to net cash provided by / (used in) operating activities:
Net (loss) income					$	(1,100)	$	662
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		6,595		6,038		20,569		18,231
Gain on disposal of property, plant and equipment		(83)		(102)		(138)		(167)
Minority interest		(5,592)		(2,328)		(660)		1,204
Write-off of debt issuance costs						-		2,552
Interest rate exchange agreement		-		(78)		-		(105)
Changes in assets and liabilities:
Accounts receivable		813		15,526		17,498		172
Due from affiliates		412		1,155		1,636		169
Other receivables		(192)		1,593		(668)		1,316
Inventories		(13,265)		9,603		(29,601)		(10,807)
Other assets		(232)		(1,478)		(974)		1,978
Accounts payable		2,766		(1,414)		1,291		(244)
Due to affiliates		(917)		(63)		(1,078)		40
Accrued compensation and benefits		(4,781)		(4,775)		(1,228)		(1,644)
Accrued insurance		(1,478)		1,387		(1,751)		666
Other accrued expenses and liabilities		3,773		3,602		7,409		7,353
Cattle purchases payable		6,197		10,246		2,804		2,857
Net cash (used in) / provided by operating activities		(12,385)		35,930
Net cash provided by operating activities						14,009		24,233
Cash flows from investing activities:
Capital expenditures, including interest capitalized		(4,988)		(5,170)		(22,758)		(13,958)
Acquistion of intangible assets						(675)		-
Proceeds from sale of property, plant and equipment		250		519		832		1,312
Net cash used in investing activities		(4,738)		(4,651)		(22,601)		(12,646)
Cash flows from financing activities:
Net receipts (payments) under revolving credit lines		8,800		(17,694)		7,274		(9,794)
Payments of notes payable and fees		(257)		(260)
Repayments of capital lease obligation		(209)		(39)
Borrowings of term note payable						-		3,594
Repayments of other indebtedness						(764)		(428)
Repayments of notes payable and fees						(772)		(3,116)
Payments of patronage refunds						-		(956)
Cash paid for financing costs						-		(1,653)
Change in overdraft balances		5,306		(6,270)		1,814		4,220
Distributions to minority interest owners in National Beef Packing Co.		(1,865)		(2,296)		(2,689)		(1,210)
Member distributions		(1,197)		-		(1,197)		(3,121)
Net cash provided by / (used in) financing activities		10,578		(26,559)
Net cash provided by (used in) financing activities						3,666		(12,464)
Effect of exchange rate changes on cash		1		16		19		29
Net (decrease) increase in cash		(6,544)		4,736
Net decrease in cash						(4,907)		(848)
Cash and cash equivalents at beginning of the period		54,428		43,611		54,428		43,611
Cash and cash equivalents at end of the period	$	47,884	$	48,347	$	49,521	$	42,763
Supplemental disclosures:
Supplemental cash disclosures:
Cash paid during the period for interest	$	2,746	$	2,493	$	17,595	$	15,120
Cash paid during the period for taxes, net	$	81	$	7	$	172	$	35

Supplemental non-cash disclosures:
Supplemental noncash disclosure:
Assets acquired through capital lease	$	4,342	$	-	$	8,697	$	-



See accompanying notes to consolidated financial statements.

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.~~included using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of the contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these estimates and judgments. For further information, refer to the audited Consolidated Financial Statements and Notes to Consolidated Financial Statements, which are included in the ~~Company's~~Company’s Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC) for the fiscal year ended August 27, 2005. 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 in order to conform to the current year presentation.

In December 2004, ~~Financial Accounting Standards Board (FASB) Statement~~SFAS No. 123 (revised 2004),Shared-Based Payment, was issued. ~~Statement 123(R)~~SFAS 123R requires an entity to recognize, in the statement of operations, the grant-date fair-value of stock options and other equity-based compensation issued to employees. The Company was required to adopt ~~Statement~~SFAS 123R on August 28, 2005. The adoption of ~~Statement~~SFAS 123R had no effect on the ~~Company's~~Company’s consolidated financial statements.

The unaudited Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, using management's best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of the contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments.

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 ~~our~~NBP’s senior unsecured obligations, ranking equal in right of payment with all of ~~our~~its 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.

(2) Inventories

Inventories at ~~November 26, 2005~~May 27, 2006 and August 27, 2005 consisted of the following (in thousands):

November 26, August 27,
2005 2005

Dressed and boxed meat products $ 77,688 $ 66,993
Beef by-products 10,294 8,476
Supplies 10,709 9,957
$ 98,691 $ 85,426

	May 27,		August 27,
	2006		2005

Dressed and boxed meat products	$	94,444	$	66,993
Beef by-products		9,219		8,476
Supplies		11,364		9,957
Total inventory	$	115,027	$	85,426

(3) Comprehensive ~~Loss~~Income (Loss)

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

13 weeks ended 13 weeks ended
November 26, November 27,
2005 2004
Net loss $ (6,401) $ (2,982)
Other comprehensive income:
Foreign currency translation adjustments 1 16
Comprehensive loss $ (6,400) $ (2,966)

	13 weeks ended		13 weeks ended		39 weeks ended		39 weeks ended
	May 27, 2006		May 28, 2005		May 27, 2006		May 28, 2005

Net income (loss)	$	12,908	$	11,097	$	(1,100)	$	662
Other comprehensive income:
Foreign currency translation adjustments		4		4		19		29
Comprehensive income (loss)	$	12,912	$	11,101	$	(1,081)	$	691

(4) Minority Interest

At any time after certain dates, the earliest being July 31, 2008, the latest being July 31, 2011, certain members of NBP management and/or NBPCo Holdings, LLC 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 effect 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 ~~November 26, 2005,~~May 27, 2006, the minority interest in National Beef was revalued by an independent appraisal process, and the value was determined to be ~~$58.6~~$65.1 million, which was in excess of its carrying value. Accordingly, the carrying value of the minority interest in National Beef increased by approximately ~~$0.02~~$0.3 million through accretion during the thirteen weeks ended ~~November 26, 2005,~~May 27, 2006, resulting in a carrying value of ~~$58.3~~$61.7 million which is reflected in the accompanying Consolidated Balance Sheet as of ~~November 26, 2005.~~ May 27, 2006.

(5) Contingencies

Schumacher v. Tyson Foods, et al.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 case was certified as a class-action matter in June, of 2004. The plaintiffs ~~claim~~claimed damages against FNBPC in the amount of approximately $4.5 million plus prejudgment interest, ~~attorneys'~~attorneys’ fees and court costs. The claim ~~will be reduced~~is subject to reduction in an unknown amount by the number of class members who have opted out of the class. Trial began March 31, 2006. On April 13, 2006, the jury returned a verdict in favor of FNBPC but against the other defendants. The ~~opt-out deadline was October 31, 2005, and plaintiffs~~defendants found liable have filed ~~their report~~post-trial motions for judgment as a matter of ~~opt-outs~~law, which isare now being evaluated for objections. Discovery has been completed. Trial is set for April 3, 2006. 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~~pending. Plaintiffs have not ~~established~~filed a ~~loss accrual associated with this claim.~~post-trial motion against FNBPC.

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

(6) United States BSE Outbreak

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 bovine spongiform encephalopathy (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~~NBP’s export business, closed their borders to the importation of edible beef products from the United States.

In July 2005, the U.S. Court of Appeals for the Ninth Circuit overturned a March 2005 preliminary injunction issued by the U.S. District Court in Billings, Montana, which had continued the closure of the Canadian border, since May 2003, to imports of live cattle. The U.S. Court of Appeals ruling resulted in the immediate reopening of the Canadian border to live cattle imports under the age of 30 months. A petition for rehearing of the Ninth Circuit's ruling to the entire panel of Ninth Circuit judges was rejected by the Ninth Circuit on October 13, 2005. The Court of Appeals action does not completely dispose of the action in the lower court and the lower court may or may not enter final rulings that will permit continued trade in live animals and beef products between the two countries.

~~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. Prior to a~~ second case of BSE in ~~the U.S., which~~Texas was confirmed in June 2005, ~~many countries had reopened their borders to allow the import of U.S. beef; however, this second~~with a third case in Alabama confirmed ~~case of BSE led to uncertainty as to whether or when additional markets may reopen, and whether or when existing open markets may close.~~in March 2006.

On December 8, 2005, the Japanese Food Safety Commission issued its final report, concluding that U.S. beef under 20 months of age is safe for Japanese consumers. On December 11, 2005, Japan reopened its market to U.S. and Canadian beef from cattle 20 months of age or younger, where prior to the border closing, there were no age restrictions on cattle used in beef products imported to Japan. Beef from cattle that ~~will qualify~~would have qualified for export to Japan ~~must~~had to comply with requirements for age verification of cattle and removal of specified risk materials (SRMs). ~~Initially, industry estimates~~Subsequently, on January 20, 2006, Japan halted the import of ~~market-ready cattle that will qualify for export~~U.S. beef after vertebral columns were found in three boxes from a small U.S. processor. That delivery violated the agreement the U.S. had with Japan regarding vertebral columns, which are included in the definition of SRMs. On June 21, 2006, Japan and the U.S. once again announced an agreement had been reached to ~~Japan range between 5% to 15%~~permit the opening of the ~~total fed cattle slaughter. The Company believes availability~~Japanese markets to U.S. beef products once inspections of ~~market-ready cattle~~qualifying U.S. beef plants are completed.

Announcements of inconclusive, preliminary test results for BSE can be expected from time to ~~its beef processing facilities will be similar to industry expectations. We cannot as yet determine the impact on profitability~~time as a result of the ~~opening~~sensitivity of the ~~Japanese market or~~new screening regime. Confirmed cases of BSE discovered in the ~~potential opening~~U.S. can lead to uncertainty regarding domestic consumer demand for beef and the export of ~~other less significant export markets.~~

~~The Company cannot~~U.S. beef. Neither USPB nor NBP can presently assess the full economic impact of the consequences of BSE on the U.S. beef packing industry or on ~~its~~the Company’s operations. The ~~Company's~~Company’s revenues and net income may continue to be materially adversely affected due to existing or new import restrictions or additional regulatory restrictions, or disruptions in domestic consumer demand for beef.

(7) ~~Long-term Debt and Loan Agreements~~

~~Senior Credit Facilities~~

Effective October 14, 2005, NBP's amended and restated senior credit facility was further amended to reflect changes in the covenant limiting NBP's net capital expenditures. There were no changes to the remaining covenants in the credit facility. NBP's net capital expenditures are now limited to amounts in each period as follows: $64 million in the combined period of FYE 2005 and FYE 2006, $35 million in FYE 2007 and $40 million in FYE 2008 and fiscal years thereafter. Prior to this amendment, FYE 2005 and FYE 2006 were separately limited to $32 million each year.

~~Capital and Operating Leases~~

Effective August 31, 2005, NBP financed a material handling system for its Liberal, Kansas, beef facility under a capital lease obligation for five years. Future minimum lease payments under this lease are $1.0 million each year for the fiscal years ended 2006, 2007, 2008, 2009 and 2010, respectively.

~~(8)~~ Earnings Per Unit

Basic EPU excludes dilution and is computed by dividing income available to unitholders by the weighted-average number of linked Class A and Class B units outstanding for the period. Class A units and Class B units shall be issued, redeemed, and transferred together on a one for one basis until the ~~board~~Board of ~~directors~~Directors determines the extent and conditions under which Class A units and Class B units may be issued, redeemed, and transferred separately.

Diluted EPU reflects the potential dilution that could occur if potential unit purchase rights were exercised or contractual appreciation rights were converted into units. Upon termination of the CEO employment agreement, at the election of the CEO, or upon mutual agreement of the Board of the Company and the CEO, the CEO may purchase up to 20,000 Class A and 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 Class A and Class B units. The diluted EPU reflects the circumstances of termination of the CEO employment agreement, and the election of CEO or agreement by the Board of the Company and the CEO for the CEO to purchase or convert contractual rights to the maximum 20,000 units at $55 per linked Class A and Class B unit for the periods as provided in the CEO employment agreement.

The diluted ~~loss~~income (loss) per linked unit calculation in the following table excludes the effect of the 20,000 unit purchase rights noted above for the ~~periods~~thirty-nine week period ending ~~November 26, 2005 and November~~May 27, ~~2004, respectively,~~2006 as the effect of including them would have been anti-dilutive to the loss per linked unit calculation.

Loss Per Linked Unit Calculation

(In thousands, except unit and per unit data) 13 Weeks Ended
November 26, 2005 November 27, 2004
(unaudited) (unaudited)
Basic loss per unit
Income available to unitholders (numerator) $ (6,401) $ (2,982)
Outstanding units (denominator) 691,845 691,845
   Per unit amount $ (9.25) $ (4.31)

Diluted loss per unit
Income available to unitholders (numerator) $ (6,401) $ (2,982)
Outstanding units 691,845 691,845
Effect of dilutive securities - unit options - -
   Units (demoninator) 691,845 691,845
   Per unit amount $ (9.25) $ (4.31)

8
Income (Loss) Per Linked Unit Calculation

(In thousands, except unit and per unit data) 13 Weeks Ended 39 Weeks Ended
May 27, 2006 May 28, 2005 May 27, 2006 May 28, 2005
(unaudited) (unaudited) (unaudited) (unaudited)
Basic income (loss) per unit
Income available to unitholders (numerator) $ 12,908 $ 11,097 $ (1,100) $ 662

Outstanding units (denominator) 691,845 691,845 691,845 691,845

   Per unit amount $ 18.66 $ 16.04 $ (1.59) $ 0.96

Diluted income (loss) per unit
Income available to unitholders (numerator) $ 12,908 $ 11,097 $ (1,100) $ 662

Outstanding units 691,845 691,845 691,845 691,845
Effect of dilutive securities - unit options 12,171 13,268 - 13,268
   Units (demoninator) 704,016 705,113 691,845 705,113

   Per unit amount $ 18.33 $ 15.74 $ (1.59) $ 0.94

(8) Long-term Debt and Loan Agreements

As of May 27, 2006, we had $329.5 million of long-term debt, of which $3.0 million was classified as a current liability. As of May 27, 2006, NBP’s fourth amended and restated credit facility consisted of a $120.0 million term loan, all of which was outstanding, and a $140.0 million revolving line of credit loan, which had outstanding borrowings of $22.3 million, outstanding letters of credit of $44.5 million and available borrowings of $66.9 million, based on the most restrictive financial covenant calculations. NBP was in compliance with all of the financial covenants under its amended and restated credit facility as of May 27, 2006. In addition to outstanding borrowings under the amended and restated credit facility, the Company had outstanding senior notes of $160.0 million, borrowings under industrial revenue bonds of $13.8 million, a term loan with CoBank, of which $5.4 million was outstanding, and capital leases of $8.0 million as of May 27, 2006.

Amended Senior Credit Facilities

Effective May 30, 2006, and related to the purchase of the assets of Brawley Beef, LLC (Brawley Beef), USPB amended its Credit Agreement to provide for the acquisition of limited partnership units in National Beef California, L.P. (NBC) and the contribution of those partnership units to NBP in exchange for an increased ownership percentage (see Note 9. Subsequent Events).

Effective June 1, 2006, and related to the purchase of the assets of Brawley Beef (see Note 9.Subsequent Events), NBP amended and restated its existing senior credit facility with a consortium of banks. The facility now consists of a $170.0 million term loan that matures in May 2016 and a $160.0 million revolving line of credit loan that matures in May 2011 that is subject to certain borrowing base limitations. This 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 from the previous credit facility as well as additional finance and legal charges associated with the new amended and restated credit facility will be written off during the Company’s fourth quarter of fiscal year 2006. Management is currently evaluating the impact of the guidance on the costs and charges. At the closing of the amended and restated credit facility, NBP had outstanding $170.0 million under the term loan and $21.1 million under the revolving loan with an additional $51.6 million of the revolving loan used in the form of letters of credit and had estimated available borrowings of $76.5 million based on the most restrictive financial covenant calculations.

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 shall be payable in semi-annual installments on the last business day of each June and December commencing June 30, 2011 in equal installments of approximately $2.8 million, with any and all remaining principal outstanding being due and payable on the maturity date. 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) August 25, 2007 or (b) the election of NBP (the Conversion Date). Currently, the interest rate for the term loan is (a) the Base Rate (as defined in the credit agreement) plus 75 basis points or (b) the LIBOR Rate (as defined in the credit agreement) plus 275 basis points, or a combination of these rates at the election of NBP. At closing of the amended and restated credit facility, the interest rate for the term loan was 8.75, as a Base Rate loan. On June 6, 2006, the term loan was converted to a 90 day LIBOR Rate loan at 8.0625%. Currently, the interest rate for the revolving loan is (a) the Base Rate plus 50 basis points or (b) the LIBOR Rate plus 250 basis points, or a combination of these rates at the election of NBP. At closing of the amended and restated credit facility, the interest rate for the revolving loan was 8.5%, as a Base Rate loan. After the Conversion Date, the interest rate for the term loan and revolving loan will be 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 imposes certain financial covenants. From May 30, 2006 until the earlier of February 28, 2007 or 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 February 28, 2007 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 $60.0 million and (ii) maintain at all times a minimum Borrowing Base Availability of at least $25.0 million. After the Conversion Date, NBP is required to maintain at all times 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 $48 million in fiscal year 2006 and $50 million in each of the fiscal years thereafter.

The amended and restated credit facility contains customary affirmative covenants, including furnishing financial statements, maintenance of insurance, conduct of business, maintenance of properties, and compliance with laws. The facility also contains customary negative covenants, including covenants restricting NBP’s ability to pay certain distributions, incur additional indebtedness, merge with another entity, sell or dispose assets, and make investments or acquire assets, among other restrictions.

(9) Subsequent Events

On June 1, 2006, USPB and its majority owned subsidiary, NBP, completed the acquisition of substantially all of the assets of Brawley Beef pursuant to the Contribution Agreement with Brawley Beef and NBC (the Agreement). NBC is a newly formed limited partnership with National Carriers, Inc., a wholly-owned subsidiary of NBP, acting as its general partner. Brawley Beef was formed in 2001 and owned by an alliance of cattle producers in Arizona and California who supplied its meat packing operations with cattle. Brawley Beef operated a new beef processing facility that began operations in December 2001in Brawley, California, and produced upscale custom cuts for sale to retail customers.

Pursuant to the terms of the Agreement, Brawley Beef contributed substantially all of its assets to NBC in exchange for limited partnership units of NBC, and NBC assumed approximately $72 million of Brawley Beef’s debt and current liabilities, subject to certain adjustments. Brawley Beef then exchanged all of its NBC units with USPB, for 44,160 new Class A USPB units and 44,160 new Class B USPB units. The value of these Class A USPB units and Class B USPB units was estimated to be $7.3 million based on recent trades at the time the Agreement was negotiated. Under a separate unit exchange agreement between USPB and NBP, USPB exchanged the limited partnership units of NBC with NBP for 5,899,297 Class A units and 664,475 Class B-1 units of NBP. As a result, USPB’s ownership interest in NBP’s Class B voting units increased to 54.76%.

Adjustments to the purchase price will be made within 60 days of closing based on changes in the working capital and debt of Brawley Beef prior to the closing date. For accounting purposes, the closing is deemed to have occurred on May 30, 2006. The Company is currently reviewing the valuation of the net assets acquired in determining the allocation of the purchase price.

Concurrently with the transfer of assets, Brawley Beef entered into long-term cattle supply agreements with both NBC and USPB under which Brawley Beef committed to supply approximately 275,000 head of cattle to NBC’s Brawley facility.

Under the terms of the Agreement, Brawley Beef made customary covenants, representations and warranties and agreed to indemnify NBC and the Company for breaches of these representations and warranties. Brawley Beef can satisfy any indemnification obligations over a three-year period with a combination of cash, deductions from payments under certain cattle contracts or surrender of its USPB units at $165 per unit. In addition, Brawley Beef pledged its USPB units to NBC to secure its obligations under the Agreement. Brawley Beef’s obligations under the Agreement and cattle supply agreements are also supported by limited guaranties from its members.

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

Disclosure Regarding Forward-Looking Statements

This report contains ~~"forward-looking~~“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"~~“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, including the identification of cattle with BSE, 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.~~customers and the potential inability to receive the anticipated benefits from the Brawley Beef acquisition.

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 theRisk Factors in Item 1. Business of the ~~Company's~~Company’s Annual Report for the year ended August 27, 2005 on Form 10-K filed with the Securities and Exchange Commission 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

~~Cyclically low~~ Drought conditions provided poor pasture in many important grazing areas of the country and contributed to larger numbers of cattle ~~supplies, along with limited access to key export markets,~~being placed on feed. The larger number of cattle on feed has ~~provided a difficult environment for beef industry participants. In general, domestic~~increased the supply of market-ready fed cattle ~~supplies are anticipated to improve over~~in recent weeks, which increases the ~~next two to three years, but with questions remaining regarding international market access, margins can be expected to continue to be negatively impacted.~~risk that this supply could decline in the coming months.

Recent Developments

On June 1, 2006, USPB and its majority owned subsidiary, NBP, completed the acquisition of substantially all of the assets of Brawley Beef, LLC (Brawley Beef) pursuant to a Contribution Agreement with Brawley Beef and National Beef California, LP (NBC) (the Agreement). NBC is a newly formed limited partnership with National Carriers, Inc., a wholly-owned subsidiary of NBP, acting as its general partner. Brawley Beef was formed in 2001 and owned by an alliance of cattle producers in Arizona and California who supplied its meat packing operations with cattle. Brawley Beef operated a new beef processing facility that began operations in December 2001in Brawley, California, and produced upscale custom cuts for sale to retail customers.

Effective May 30, 2006, and related to the purchase of the assets of Brawley Beef, USPB amended its Credit Agreement to provide for the acquisition of limited partnership units in NBC and the contribution of those partnership units to NBP in exchange for an increased ownership percentage (see Note 9. Subsequent Events).

Under the terms of the Agreement, Brawley Beef made customary covenants, representations and warranties and agreed to indemnify NBC and the Company for breaches of these representations and warranties. Brawley Beef can satisfy any indemnification obligations over a three-year period with a combination of cash, deductions from payments under certain cattle contracts or surrender of its USPB units at a value of $165 per unit. In addition, Brawley Beef pledged its USPB units to NBC to secure its obligations under the Agreement. Brawley Beef’s obligations under the Agreement and cattle supply agreements are also supported by limited guaranties from its members.

Effective June 1, 2006, and related the purchase of the assets of Brawley Beef, NBP’s amended and restated senior credit facility with a consortium of banks was further amended and restated. The facility now consists of a $170.0 million term loan that matures in May 2016 and a $160.0 million revolving line of credit loan that matures in May 2011 that is subject to certain borrowing base limitations. These transactions are more fully described inLiquidity and Capital Resources below.

On December 8, 2005, the Japanese Food Safety Commission issued its final report, concluding that U.S. beef under 20 months of age is safe for Japanese consumers. On December 11, 2005, Japan reopened its market to U.S. and Canadian beef from cattle 20 months of age or younger, where prior to the border closing, there were no age restrictions on cattle used in beef products imported to Japan. Beef from cattle that ~~will qualify~~would have qualified for export to Japan ~~must~~had to comply with requirements for age verification of cattle and removal of specified risk materials (SRMs). ~~Initially, industry estimates~~Subsequently, on January 20, 2006, Japan halted the import of ~~market-ready cattle that will qualify for export~~U.S. beef after vertebral columns were found in three boxes from a small U.S. processor. That delivery violated the agreement the U.S. had with Japan regarding vertebral columns, which are included in the definition of SRMs. On June 21, 2006, Japan and the U.S. once again announced an agreement had been reached to ~~Japan range between 5% to 15%~~permit the opening of the ~~total fed cattle slaughter. The Company believes availability~~Japanese markets to U.S. beef products, commencing when inspections of ~~market-ready cattle~~qualifying U.S. beef plants are completed.

Results of Operations

Thirteen weeks ended ~~November 26, 2005~~May 27, 2006 compared to thirteen weeks ended ~~November 27, 2004~~May 28, 2005

General.Net ~~loss~~income for the thirteen weeks ended ~~November 26, 2005~~May 27, 2006 was ~~$6.4~~$12.9 million compared to ~~net loss of $3.0~~$11.1 million for the thirteen weeks ended ~~November 27, 2004, a change~~May 28, 2005, an increase of ~~$3.4~~$1.8 million, or ~~113.3%~~16.2%. Sales were higher in the thirteen weeks ended ~~November 26, 2005 than~~May 27, 2006 compared to those of the prior ~~year~~ period ~~partially~~ due to an approximate 2.7% increase in the number of cattle ~~processed of approximately 1.4%,~~slaughtered at average weights ~~that averaged 1.0%~~about 2.8% higher than last year, partially offset by an average decline in sales prices per head of 2.9% for the ~~same period~~13 weeks ended May 27, 2006. Live cattle prices declined approximately 8.1% in the ~~prior year. Additionally, while sales prices improved by approximately 2.4% compared to the same~~current period ~~in the prior year, cost of sales increased at a higher rate, due in part to~~resulting from an increase in ~~live cattle prices of approximately 3.7% resulting from the tightened supply of~~available market-ready cattle.

Total costs and expenses of ~~$1,100.5~~$1,103.0 million and ~~$1,048.9~~$1,098.0 million for the thirteen weeks ended ~~November 26,~~May 27, 2006 and May 28, 2005, ~~and November 27, 2004,~~ respectively, were ~~100.4%~~97.2% as a percent of sales for the thirteen weeks ended ~~November 26, 2005~~May 27, 2006 compared to ~~99.8%~~97.5% for the thirteen weeks ended ~~November~~May 28, 2005. Increasing numbers of market-ready cattle became available during the thirteen weeks ended May 27, ~~2004. Tightened~~2006 compared to the prior period, contributing to an 8.1% decline in live cattle prices. Additionally, improved plant capacity utilization contributed to an increase in gross margin, resulting in an increase in operating income of $2.9 million, or 10.1% of operating income.

Net Sales. Net sales were $1,134.5 million for the thirteen weeks ended May 27, 2006 compared to $1,126.6 million for the thirteen weeks ended May 28, 2005, an increase of $7.9 million, or 0.7%. The moderate increase resulted from an approximate 2.7% increase in number of cattle slaughtered at average weights about 2.8% higher than last year, offset by an average decline in sales prices per head of 2.9% for the 13 weeks ended May 27, 2006. Sales improved due to continued growth in value-added sales for the thirteen weeks ended May 27, 2006 as compared to May 28, 2005.

Cost of Sales. Cost of sales was $1,085.9 million for the thirteen weeks ended May 27, 2006 compared to $1,082.9 million for the thirteen weeks ended May 28, 2005, an increase of $3.0 million, or 0.3%. The moderate increase resulted primarily from an approximate 2.7% increase in number of cattle slaughtered at average weights about 2.8% higher than last year, offset by a decline in live cattle prices of approximately 8.1% in the current period. Cost of sales benefited from an increase in available market-ready cattle during the thirteen weeks ended May 27, 2006 as compared to May 28, 2005.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $10.0 million for the thirteen weeks ended May 27, 2006 compared to $9.0 million for the thirteen weeks ended May 28, 2005, an increase of $1.0 million, or 11.1%. The current year reflects an increase in marketing expense and travel expense of approximately $0.5 million associated with supporting two new marketing programs, approximately $0.3 from long-term bonus programs, increased travel associated in part with the Brawley Beef acquisition negotiations, and also from increased fuel costs.

Depreciation and Amortization Expense. Depreciation and amortization expenses were $7.1 million for the thirteen weeks ended May 27, 2006 compared to $6.1 million for the thirteen weeks ended May 28, 2005, an increase of $1.0 million, or 16.4%. Depreciation expense increased due largely to assets being placed into service, primarily at the Dodge City and Liberal beef plants, during the fourth quarter of fiscal year 2005 and the first, second and third quarters of fiscal year 2006.

Operating Income. Operating income was $31.5 million for the thirteen weeks ended May 27, 2006 compared to $28.6 million for the thirteen weeks ended May 28, 2005, an increase of $2.9 million, or 10.1%. The increase resulted primarily from improved market conditions resulting from the increase of available market-ready cattle, as well as an increased number of cattle slaughtered in the current period at higher average weights than the same period last year.

Interest Expense. Interest expense was $8.0 million for the thirteen weeks ended May 27, 2006 compared to $7.3 million for the thirteen weeks ended May 28, 2005, an increase of $0.7 million, or 9.6%. The increase was due primarily to higher interest rates on our variable rate debt for the thirteen weeks ended May 27, 2006, as compared to the same period in fiscal year 2005.

Other, net.Other, net non-operating income was $0.7 million for the thirteen weeks ended May 27, 2006 compared to non-operating income of $0.4 million for the thirteen weeks ended May 28, 2005, an increase of $0.3 million, due primarily to $0.4 million in patronage income received in the current period.

Income Tax (Benefit) Expense. Income tax benefit was $0.1 million for the thirteen weeks ended May 27, 2006 compared to income tax expense of $0.8 million for the thirteen weeks ended May 28, 2005, a decrease in expense of $0.9 million. Income tax expense decreased due to lower income recorded by National Carriers, Inc., which is organized as a C Corporation, in the current period compared to the same period last year.

Thirty-nine weeks ended May 27, 2006 compared to thirty-nine weeks ended May 28, 2005

General.Net loss for the thirty-nine weeks ended May 27, 2006 was $1.1 million compared to net income of $0.7 million for the thirty-nine weeks ended May 28, 2005, a decrease in income of $1.8 million. Sales and cost of sales were both higher in the thirty-nine weeks ended May 27, 2006 than those of the prior year period primarily due to an increase of approximately 1.4% in the number of cattle slaughtered, and an increase in live cattle weights of approximately 1.6%, combined with a slight increase in live cattle prices of approximately 0.1% and an approximate 1.0% increase in sales prices per head. For the thirty-nine weeks ended May 27, 2006, cost of sales increased at a higher rate than sales, negatively impacting gross margin for the thirty-nine weeks ended May 27, 2006 as compared to the same period in the prior year.

Total costs and expenses of $3,290.4 million and $3,176.4 million for the thirty-nine weeks ended May 27, 2006 and May 28, 2005, respectively, were 99.4% as a percent of sales for the thirty-nine weeks ended May 27, 2006 compared to 99.1% for the thirty-nine weeks ended May 28, 2005. The first half of fiscal year 2006 was negatively impacted by the tightened supply of market-ready cattle; increased supply of market-ready cattle ~~and~~helped lower live cattle costs in the third quarter of fiscal year 2006. Lower plant capacity utilization in the first half of fiscal year 2006 combined with continued export market closures contributed to a decline in gross margin, resulting in ~~a decrease in~~lower operating income ~~of $6.7 million.~~for the thirty-nine weeks ended May 27, 2006.

Net Sales. Net sales were ~~$1,095.7~~$3,310.3 million for the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 compared to ~~$1,050.7~~$3,204.0 million for the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004,~~May 28, 2005, an increase of ~~$45.0~~$106.3 million, or ~~4.3%~~3.3%. The increase resulted primarily from an increase ~~in boxed beef and beef product prices~~ of approximately ~~2.4% combined with an approximate~~ 1.4% ~~increase~~ in the number of cattle ~~processed~~slaughtered, an increase in live cattle weights of approximately 1.6% and an approximate 1.0% increase in sales prices per head in the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005 at weights that averaged 1.0% higher than~~May 27, 2006 compared to the same period in the prior year. Sales prices improved due to an improved product sales mix and continued growth in value-added sales for the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 as compared to ~~November 27, 2004.~~May 28, 2005.

Cost of Sales. Cost of sales was ~~$1,084.5~~$3,241.2 million for the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 compared to ~~$1,034.2~~$3,131.7 million for the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004,~~May 28, 2005, an increase of ~~$50.3~~$109.5 million, or ~~4.9%~~3.5%. The increase resulted primarily from ~~a 3.7% increase in live cattle prices resulting from tightened supply of market-ready cattle, combined with~~ an approximate 1.4% increase in the number of cattle ~~processed from 2004 of 1.4%~~slaughtered, and an increase in ~~average~~ live cattle weights of ~~1.0%~~approximately 1.6%, combined with a slight increase in live cattle prices of approximately 0.1%. The first half of fiscal year 2006 was negatively impacted by the tightened supply of market-ready cattle; increased supply of market-ready cattle helped lower live cattle costs in the third quarter of fiscal year 2006.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were ~~$9.4~~$28.6 million for the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 compared to ~~$8.6~~$26.5 million for the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004,~~May 28, 2005, an increase of ~~$0.8~~$2.1 million, or ~~9.3%. The increase reflects~~7.9%, which is primarily due to an increase in payroll and ~~related~~benefit expenses of approximately ~~$0.4~~$1.5 million, and an approximate $1.1 million increase in marketing expense and travel expense associated with supporting two new marketing programs, increased travel associated in part with the Brawley Beef acquisition negotiations, and ~~related expenses of approximately $0.3 million.~~also from increased fuel costs; partially offset by an approximate $1.0 million decrease in bad debt reserve resulting from miscellaneous recoveries.

Depreciation and Amortization Expense. Depreciation and amortization expenses were ~~$6.6~~$20.6 million for the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 compared to ~~$6.0~~$18.2 million for the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004,~~May 28, 2005, an increase of ~~$0.6~~$2.4 million, or ~~10.0%~~13.2%. Depreciation expense increased due largely to assets being placed into service, primarily at the Dodge City and Liberal beef plants, during the fourth quarter of fiscal year 2005 and the first, second ~~third~~ and ~~fourth~~third quarters of fiscal year ~~2005.~~2006.

Operating ~~(Loss)~~ Income. Operating ~~loss~~income was ~~$4.8~~$19.9 million for the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 compared to ~~operating income of $1.9~~$27.6 million for the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004,~~May 28, 2005, a decrease of ~~$6.7~~$7.7 million, or ~~352.6%~~27.9%. The ~~decrease resulted primarily from a~~first half of fiscal year 2006 was negatively impacted by the tightened supply of market-ready cattle; increased supply of market-ready cattle ~~and~~helped lower live cattle costs in the third quarter of fiscal year 2006. Lower plant capacity ~~utilization.~~utilization in the first half of fiscal year 2006 combined with continued export market closures contributed to a decline in gross margin, resulting in lower operating income for the thirty-nine weeks ended May 27, 2006.

Interest Expense. Interest expense was ~~$7.4~~$23.2 million for the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 compared to ~~$7.2~~$21.8 million for the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004,~~May 28, 2005, an increase of ~~$0.2~~$1.4 million, or ~~2.8%~~6.4%. The increase was due primarily to higher interest rates on our variable rate debt, partially offset by a decrease in average revolver borrowings for the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006, as compared to the same period in fiscal year 2005.

Other, net.Other, net non-operating income was $2.0 million for the thirty-nine weeks ended May 27, 2006 compared to non-operating expense of $2.1 million for the thirty-nine ended May 28, 2005, an increase in income of $4.1 million. The thirty-nine weeks ended May 27, 2006 included $0.6 million in income we received for a settlement of a lawsuit related to corrugated packaging materials and $0.4 million in patronage income received, and the same period for fiscal year 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.

Income Tax Expense. Income tax expense was ~~$0.5~~$1.0 million for ~~both~~ the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005 and~~May 27, 2006 compared to $1.9 million for the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004.~~May 28, 2005, a decrease of $0.9 million, or 47.4%. Income tax expense isdecreased due to lower income recorded ~~on income from~~by National Carriers, Inc., which is organized as a C ~~Corporation.~~Corporation, in the current period compared to the same period last year.

Liquidity and Capital Resources

As of ~~November 26, 2005,~~May 27, 2006, we had net working capital of ~~$175.2~~$178.1 million, which included ~~$0.3~~$1.9 million in distributions payable, and cash and cash equivalents of ~~$47.9~~$49.5 million, including ~~$3.9~~$4.0 million restricted to IRB approved expenditures. As of August 27, 2005, we had net working capital of $178.6 million, which included $1.9 million in distributions payable, and cash and cash equivalents of $54.4 million, including $3.9 million restricted to IRB approved expenditures. Our primary sources of liquidity are cash flows from operations and available borrowings under ~~our~~NBP’s amended and restated credit facility.

As of ~~November 26, 2005,~~May 27, 2006, we had ~~$327.7~~$329.5 million of long-term debt, of which ~~$1.8~~$3.0 million was classified as a current liability. As of ~~November 26, 2005, NBP's~~May 27, 2006, NBP’s fourth amended and restated credit facility consisted of a $120.0 million term loan, all of which was outstanding, and a $140.0 million revolving line of credit loan, which had outstanding borrowings of ~~$23.8~~$22.3 million, outstanding letters of credit of ~~$44.0~~$44.5 million and available borrowings of ~~$51.2~~$66.9 million, based on the most restrictive financial covenant calculations. Cash flow from operations and borrowings under ~~NBP's~~NBP’s amended and restated credit facility ~~has~~have funded ~~our~~its working capital requirements, capital expenditures and other general corporate purposes. ~~We were~~NBP was in compliance with all of ~~our~~the financial covenants under ~~our~~its amended and restated credit facility as of ~~November 26, 2005.~~May 27, 2006.

In addition to outstanding borrowings under the amended and restated credit facility, the Company had outstanding senior notes of $160.0 million, borrowings under industrial revenue bonds of $13.8 million, a term loan with CoBank, of which ~~$5.9~~$5.4 million was outstanding, and a capital ~~lease~~leases of ~~$4.2~~$8.0 million as of ~~November 26, 2005. On August 31, 2005,~~May 27, 2006.

Amended and Restated Senior Credit Facilities

Effective May 30, 2006, and related to the purchase of the assets of Brawley Beef, more fully described inRecent Developments above, USPB amended its Credit Agreement to provide for the acquisition of limited partnership units in National Beef California, L.P. and the contribution of those partnership units to NBP ~~financed $4.3~~in exchange for an increased ownership percentage (see Note 9. Subsequent Events).

Effective June 1, 2006, and related to the purchase of the assets of Brawley Beef, more fully described inRecent Developments above, NBP amended and restated its existing senior credit facility with a consortium of banks. The facility now consists of a $170.0 million term loan that matures in May 2016 and a $160.0 million revolving line of credit loan that matures in May 2011 that is subject to certain borrowing base limitations. This 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 from the previous credit facility as well as additional finance and legal charges associated with the new amended and restated credit facility will be written off during the Company’s fourth quarter of fiscal year 2006. Management is currently evaluating the impact of the guidance on the costs and charges. At the closing of the amended and restated credit facility, NBP had outstanding $170.0 million under ~~this~~the term loan and $21.1 million under the revolving loan with an additional $51.6 million of the revolving loan used in the form of letters of credit and had estimated available borrowings of $76.5 million based on the most restrictive financial covenant calculations.

The borrowings under the revolving loan are available for NBP’s working capital ~~lease obligation~~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 shall be payable in semi-annual installments on the last business day of each June and December commencing June 30, 2011 in equal installments of approximately $2.8 million, with any and all remaining principal outstanding being due and payable on the maturity date. 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 ~~material handling system~~conversion to more favorable interest rates and more restrictive financial covenants on the earlier of (a) August 25, 2007 or (b) the election of NBP (the Conversion Date). Currently, the interest rate for the term loan is (a) the Base Rate (as defined in the credit agreement) plus 75 basis points or (b) the LIBOR Rate (as defined in the credit agreement) plus 275 basis points, or a combination of these rates at ~~its Liberal, Kansas, beef facility. Future~~the election of NBP. At closing of the amended and restated credit facility, the interest rate for the term loan was 8.75%. On June 6, 2006, the term loan was converted to a 90 day LIBOR Rate loan at 8.0625%. Currently, the interest rate for the revolving loan is (a) the Base Rate plus 50 basis points or (b) the LIBOR Rate plus 250 basis points, or a combination of these rates at the election of NBP. At closing of the amended and restated credit facility, the interest rate for the revolving loan was 8.5%, as a Base Rate loan.After the Conversion Date, the interest rate for the term loan and revolving loan will be 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 imposes certain financial covenants. From May 30, 2006 until the earlier of February 28, 2007 or the Conversion Date, NBP is required to (i) have as of the end of each fiscal quarter a minimum ~~lease payments under this lease~~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 February 28, 2007 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 $60.0 million and (ii) maintain at all times a minimum Borrowing Base Availability of at least $25.0 million. After the Conversion Date, NBP is required to maintain at all times 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 ~~$1.0~~limited to $48 million in fiscal year 2006 and $50 million in each ~~year for~~of the fiscal years ~~ended 2006, 2007, 2008, 2009~~thereafter.

The amended and ~~2010, respectively.~~restated credit facility contains customary affirmative covenants, including furnishing financial statements, maintenance of insurance, conduct of business, maintenance of properties, and compliance with laws. The facility also contains customary negative covenants, including covenants restricting NBP’s ability to pay certain distributions, incur additional indebtedness, merge with another entity, sell or dispose assets, and make investments or acquire assets, among other restrictions.

We believe that available borrowings under the 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. For a review of our obligations that affect liquidity, please see theCash Payment Obligations table in Item 7.~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations of our ~~report~~Annual Report on Form 10-K for the fiscal year ended August 27, 2005.

Operating Activities

Net cash ~~used in~~provided by operating activities in the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 was ~~$12.4~~$14.0 million compared to net cash provided by operating activities ~~$35.9~~of $24.2 million in the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004.~~May 28, 2005. The ~~$48.3~~$10.2 million decrease was primarily due to an increase in working capital requirements in the current period resulting ~~partially~~ from increased beef inventory ~~valuation,~~volumes partially offset by lower live cattle prices, combined with a ~~larger~~ net loss in the current year compared to net income in the same period last year.

Investing Activities

Net cash used in investing activities was ~~$4.7~~$22.6 million in the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 compared to ~~$4.7~~$12.6 million in the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004.~~May 28, 2005. This ~~slight~~ increase in cash used was primarily attributable to an increase in expenditures for property, plant and equipment related to improving operating efficiencies, primarily at our Dodge City and Liberal facilities in the current year.

Financing Activities

Net cash provided by financing activities was ~~$10.6~~$3.7 million in the ~~thirteen~~thirty-nine weeks ended ~~November 26, 2005~~May 27, 2006 compared to net cash used in financing activities of ~~$26.6~~$12.5 million in the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2004.~~May 28, 2005. The change was primarily attributed to a ~~$26.5~~$17.1 million difference in the ~~thirteen~~thirty-nine week change of fiscal year 2006 as compared to the ~~thirteen~~thirty-nine week change in fiscal year 2005 in revolving credit borrowings, ~~combined with an $11.6~~offset by a $2.4 million ~~increase~~decrease in the overdraft ~~balance.~~

~~Amended and Restated SeniorCredit Facility~~

NBP's amended and restated credit facility 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 definedbalance in the ~~credit agreement) plus an applicable margin or a LIBOR rate plus an applicable margin. As~~current year, combined with $1.7 million of November 26, 2005, the interest rate for the term loan was equal to LIBOR plus 275 basis points (6.6%) and the weighted average interest rate for the revolving loan was equal to a combination of LIBOR plus 250 basis points plus Prime plus 50 basis points (a combined weighted average of 7.1%). After the Conversion Date, the interest rate for the term loan and the revolving loan will be determined by reference to a matrix of rates keyed to NBP's funded debt to EBITDA (as definedfinancing costs paid 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. As defined in the amended credit facility, EBITDA contains specified adjustments. NBP was in compliance with all of the financial covenants under its amended and restated credit facility as of November 26,year 2005.

~~After the Conversion Date, NBP will be subject to the following financial covenants:~~

~~(i) A maximum Funded Debt to EBITDA Ratio (as defined in the credit agreement), as follows:~~

	~~Funded Debt~~
	~~to EBITDA~~	~~Fiscal Quarter Ended~~
	~~4.50 to 1.00~~	~~August 31, 2005 through May 31, 2006~~
	~~4.25 to 1.00~~	~~August 31, 2006 through November 30, 2006~~
	~~4.00 to 1.00~~	~~February 28, 2007 through May 31, 2007~~
	~~3.75 to 1.00~~	~~August 31, 2007 and thereafter~~

~~(ii) A maximum Senior Secured Funded Debt to EBITDA Ratio (as defined in the credit agreement), as follows:~~

	~~Senior Secured~~
	~~Funded Debt~~
	~~to EBITDA Ratio~~	~~Fiscal Quarter Ended~~
	~~3.25 to 1.00~~	~~August 31, 2005 through May 31, 2006~~
	~~2.75 to 1.00~~	~~August 31, 2006 and thereafter~~

	~~(iii) A minimum four-quarter rolling EBITDA as follows:~~

	~~EBITDA~~	~~Fiscal Quarter Ended~~
	~~$72,000,000~~	~~August 31, 2005 through May 31, 2006~~
	~~$75,000,000~~	~~August 31, 2006 through May 31, 2007~~
	~~$85,000,000~~	~~August 31, 2007 and thereafter~~

	~~(iv) A minimum four-quarter rolling Debt Service Coverage Ratio (as defined in the credit agreement) as follows:~~

	~~Debt Service~~
	~~Coverage Ratio~~	~~Fiscal Quarter Ended~~
	~~2.00 to 1.00~~	~~August 31, 2005 and thereafter~~

Effective October 14, 2005, the amended senior credit facility was further amended to reflect changes in the covenant limiting NBP's net capital expenditures. There were no changes to the remaining covenants in the credit facility. NBP's net capital expenditures are now limited to amounts in each period as follows: $64 million in the combined period of FYE 2005 and FYE 2006, $35 million in FYE 2007 and $40 million in FYE 2008 and fiscal years thereafter. Prior to this amendment, FYE 2005 and FYE 2006 were separately limited to $32 million each year.

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 ~~NBP's~~NBP’s 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, NBP 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, NBP enters into forward sales contracts at prices determined prior to shipment. We may hedge the commodity price risk associated with these activities in order to mitigate this price risk. While this may tend to limit ~~NBP's~~NBP’s 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.

NBP may use futures contracts in order 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 for boxed beef sales are treated as ~~"normal~~“normal purchases and ~~sales"~~sales” and not marked to market. SFAS No. 133 imposes extensive recordkeeping requirements in order 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 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~~ NBP uses a sensitivity analysis to evaluate the ~~number~~effect that changes in the market value of ~~futures positions and~~commodities will have on these commodity derivative instruments. As of May 27, 2006, the potential change in fair value of ~~those positions and related firm commitments at November 26,~~applicable commodity prices, assuming a hypothetical 10% decrease in the underlying commodity price, was $12.1 million. As of August 25, 2005, ~~and August 27, 2005. A position~~the potential change in ~~live cattle consists~~fair value of ~~40,000 pounds. Firm commitments for purchase are for live cattle and firm commitments for sales are for boxed beef (dollars~~applicable commodity prices, assuming a hypothetical 10% decrease in ~~thousands).~~the underlying commodity price, was negligible.

Positions expiring
within one year Fair Value
November 26, 2005
Live Cattle
   Futures long -
   Futures short
1,761
(1,573)
   Firm Commitments Purchase 1,452
   Firm Commitments Sale -

August 27, 2005
Live Cattle
   Futures long -
   Futures short
443
(51)
   Firm Commitments Purchase 62
   Firm Commitments Sale -

Interest Rates.As a result of the ~~Company's~~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 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. Our variable interest expense is sensitive to changes in the general level of interest rates.

Our exposure to interest rate risk has not materially changed since August 27, 2005.

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 Chief Reporting and Compliance Officer. Based upon that evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Reporting and Compliance 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 ~~November 26, 2005~~May 27, 2006 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.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings, see Note 6. 5.Contingencies to our Consolidated Financial Statements included in Part I-Item 1 of this Form 10-Q.

Item 1A. Risk Factors

The risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended August 27, 2005 have not materially changed. Please refer to the ~~Company's~~Company’s report on Form 10-K for the ~~period~~fiscal year ended August 27, 2005 to consider those risk factors.

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

~~None.~~For information regarding the issuance of units by the Company in connection with the acquisition of assets of Brawley Beef, seeManagement’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments above. A total of 44,160 Class A Units and 44,160 Class B Units were issued to Brawley Beef at an agreed estimated valuation of $7.3 million. The units were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.

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 November 30 , 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 two (2) directors to serve for three-year terms expiring after the 2008 fiscal year. The four nominees who stood for election to the Board of Directors were incumbent directors John Adams and Kelly K. Giles and new candidates Carol Keiser and Rex McCloy. Biographical information regarding Mr. Adams and Mr. Giles has previously been included in the Company's filings with the Securities and Exchange Commission, while information regarding Ms. Keiser and Mr. McCloy is presented in the following paragraphs. None.

Carol Keiser is president of C-BAR Cattle Company, Inc. which she established and currently manages operations for feeding 5,000 to 6,000 head of cattle in feedlots in Texas, Kansas, Nebraska, and Western Illinois. Prior to C-BAR Cattle Company she developed health and well-being procedures for Loveless Feedlot in Illinois. Previously, Ms. Keiser taught vocational agriculture and served as a Future Farmers of America advisor. Ms. Keiser is a Certified Livestock Manager, Certified Livestock Dealer and served on the Board of Directors of the Council of Food and Agricultural Research (C-FAR), Illinois Beef Association Check-off Division, past chairperson of the University of Illinois Alumni Association and the University of Illinois Agriculture, Consumer and Environmental Sciences Alumni Board. She is also a member of the National Cattlemen's Beef Association and has served on NCBA's animal health and tax committees. In addition, Ms. Keiser is a professional member of the American Society of Animal Science and American Meat Science Association. Currently, Ms. Keiser represents food animal commodity producers on the National Agricultural Research, Extension, Education, and Economics Advisory Board, which is a primary advisory board to the U.S. Secretary of Agriculture. In addition, she serves as Chair of the Farm Foundation, Roundtable Steering Committee. Ms. Keiser also serves on the Steering Committee of the Future of Animal Agriculture Project, specifically representing beef producers on the Food Safety and Animal Health Subcommittee. Ms. Keiser holds a Bachelors degree in Animal Science from the University of Illinois.

Rex McCloy is manager and part-owner of McLeod Farms Inc., a family-owned business headquartered in Morse, TX. The operation includes a 6,500 head capacity feed yard, a 7,000 acre irrigated farm, a backgrounding operation and a 20,000 acre ranch in Harding Co., NM. Mr. McCloy is a member of the National Cattlemen's Beef Association, the Texas Cattle Feeder's Association (TCFA) and the Texas Southwestern Cattle Raiser's Association. He is a past board member and marketing committee chairman of TCFA. In addition he is a former member of U.S. Premium Beef's nominating committee. Mr. McCloy holds a Bachelors degree in Agricultural Economics from Texas Tech University.

At the Annual Meeting, under procedures established by the Company's nominating committee, Mr. Adams and Ms. Keiser stood for election to the same seat on the USPB Board of Directors and Mr. Giles and Mr. McCloy stood for election to the other open seat on the Board of Directors. USPB's members elected Carol Keiser and Rex McCloy to serve as directors on the Board of Directors for a term that will expire after fiscal year 2008. The election of the nominees was by a majority of the members present and voting at the Annual Meeting, expressed by a written ballot. In the election between Mr. Adams and Ms. Keiser, out of a total of 96 votes, Mr. Adams received a total of 46 votes and Ms. Keiser received a total of 50 votes, winning election to the Board of Directors. In the election between Mr. Giles and Mr. McCloy, Mr. Giles received a total of 35 votes and Mr. McCloy received a total of 61 votes to win election to the Board of Directors. The other members of the Board of Directors, Mr. Ryan, Mr. Gardiner, Mr. Fairleigh, Mr. Laue and Mr. Bohn continued in service as members of the USPB Board of Directors following the Annual Meeting.

Item 5. Other Information

NBP may purchase a portion of its outstanding Senior Notes from time to time in accordance with the limits imposed under its senior credit facility.

Item 6. Exhibits

(A) Exhibits

~~(A)~~	2.1*	~~Exhibits~~ Contribution Agreement dated as of May 19, 2006 between Brawley Beef,
		LLC, National Beef California, L.P. and National Beef Packing Company,
		LLC.

~~10.1~~	2.2*	Contribution Agreement dated as of May 30, 2006 between U.S. Premium
		~~Second~~ Beef, LLC and Brawley Beef, LLC

	2.3*	Contribution Agreement dated as of May 30, 2006 between U.S. Premium
		Beef, LLC and National Beef Packing Company, LLC

	3.1(a)	Limited Liability Company Agreement of National Beef Packing Company,
		LLC, as of August 6, 2003.

	3.1(b)	Amendment to ~~Fourth~~the Limited Liability Company Agreement of National Beef
		Packing Company, LLC, as of July 7, 2005.

	3.1(c)	Revised Exhibit 3.1 to the Limited Liability Company Agreement of National
		Beef Packing Company, LLC, effective as of May 30, 2006.

	10.1(a)	Fifth Amended and Restated Credit Agreement dated as of ~~October 14, 2005,~~May 30, 2006 by
		and among ~~NBP,~~National Beef Packing Company, LLC and certain agents, lenders
		and issuers (incorporated by reference to Exhibit 10.1 to ~~NBP's~~ the Company’s
		Current Report on Form 8-K filed with the ~~SEC~~Commission on ~~October 20, 2005)~~June 22, 2006).


~~31.1~~	10.1(b)	Sixth Amendment to Credit Agreement, dated June 20, 2006, effective as of
		May 30, 2006, by and among U.S. Premium Beef, LLC and CoBank, ACB, as
		agent for the benefit of the syndication parties. (filed herewith)

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

~~31.2~~	31.2		Certification of the Principal Financial and Accounting Officer pursuant to
		Section 302 of the Sarbanes-Oxley Act of 2002.

~~32.1~~	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.~~
		of 2002.

~~32.2~~	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~~Sarbanes-
		Oxley Act of 2002.

* The Contribution Agreements in Exhibits 2.1, 2.2 and 2.3 contain Schedules and Exhibits that the Company hereby agrees to furnish supplementally to the SEC upon its request.

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, LLC


By:	/s/ Steven D. Hunt
		Steven D. Hunt
	Chief Executive Officer
	(Principal Executive Officer)



By:	/s/ Scott J. Miller
		Scott J. Miller
	Chief Reporting and Compliance Officer
	(Principal Financial and Accounting Officer)

Date: ~~January 9,~~July 10, 2006


			November 26,		August 27,
	Assets		2005		2005
			(unaudited)
Current assets:
Cash and cash equivalents		$	47,884	$	54,428
Accounts receivable, less allowance for returns and doubtful accounts
	of $3,852 and $3,903 in fiscal years 2006 and 2005, respectively		170,041		170,854
Due from affiliates			2,567		2,979
Other receivables			3,577		3,385
Inventory			98,691		85,426
Other current assets			10,962		9,920
	Total current assets		333,722		326,992
Property, plant and equipment, at cost			267,382		258,493
Less accumulated depreciation			(49,249)		(43,331)
	Net property, plant and equipment		218,133		215,162
Goodwill			78,858		78,858
Other intangible assets, net of accumulated amortization
of $3,738 and $3,335 in fiscal years 2006 and 2005, respectively			28,023		28,426
Other assets			5,900		6,710
	Total assets	$	664,636	$	656,148

	Liabilities and Capital Shares and Equities
Current liabilities:
Current installments of long-term debt		$	1,808	$	1,030
Cattle purchases payable			64,805		54,394
Accounts payable			46,372		42,514
Due to affiliates			616		1,533
Accrued compensation and benefits			17,387		22,168
Accrued insurance			14,050		15,528
Other accrued expenses and liabilities			13,156		9,389
Distributions payable			286		1,865
	Total current liabilities		158,480		148,421
Long-term liabilities:
Long-term debt, excluding current installments			325,896		313,998
Other liabilities			4,744		4,738
	Total long-term liabilities		330,640		318,736
	Total liabilities		489,120		467,157
Minority interest in National Beef Packing Company and Kansas City Steak, LLC			59,112		64,971
Capital shares and equities:
Members' capital, 691,845 Class A units and 691,845 Class B units
	authorized, issued and outstanding		65,726		73,343
Patronage notices			50,642		50,642
Accumulated other comprehensive income			36		35
	Total capital shares and equities		116,404		124,020
	Total liabilities and capital shares and equities	$	664,636	$	656,148

See accompanying notes to consolidated financial statements.

Loss Per Linked Unit Calculation

(In thousands, except unit and per unit data)	13 Weeks Ended
	November 26, 2005		November 27, 2004
	(unaudited)		(unaudited)
Basic loss per unit
Income available to unitholders (numerator)	$	(6,401)	$	(2,982)
Outstanding units (denominator)		691,845		691,845
Per unit amount	$	(9.25)	$	(4.31)

Diluted loss per unit
Income available to unitholders (numerator)	$	(6,401)	$	(2,982)
Outstanding units		691,845		691,845
Effect of dilutive securities - unit options		-		-
Units (demoninator)		691,845		691,845
Per unit amount	$	(9.25)	$	(4.31)

	Positions expiring
	within one year	Fair Value
November 26, 2005
Live Cattle
Futures long		-
Futures short	1,761	(1,573)
Firm Commitments Purchase		1,452
Firm Commitments Sale		-

August 27, 2005
Live Cattle
Futures long		-
Futures short	443	(51)
Firm Commitments Purchase		62
Firm Commitments Sale		-