10-Q

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 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 September 26, 2020
or

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

For the transition period from ______  to ______.

Commission file number 333-115164

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

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

12200 North Ambassador
Drive Kansas City, MO 64163
(Address of principal executive offices)

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

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

     Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑   No ☐

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and ‘emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐   Accelerated Filer ☐   Non-Accelerated Filer ☑    Small Reporting Company ☐
Emerging Growth Company  ☐

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☑

     The registrant’s units are not traded on an exchange or in any public market. As of October 31, 2020, there were 735,385 Class A units and 755,385 Class B units outstanding.

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchanges on which registered
N/A	N/A	N/A

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	Page No.
Item 1.	Financial Statements (unaudited).	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	8
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	12
Item 4.	Controls and Procedures.	12
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings.	12
Item 1A.	Risk Factors.	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	13
Item 3.	Defaults Upon Senior Securities.	13
Item 4.	Mine Safety Disclosures.	13
Item 5.	Other Information.	13
Item 6.	Exhibits.	13
	Signatures.	15

     Unless the context indicates or otherwise requires, the terms “USPB”, “the Company”, “we”, “our”, and “us” refer to U.S. Premium Beef, LLC. As used in this report, the terms “NBP” and “National Beef” refer to National Beef Packing Company, LLC, a Delaware limited liability company.

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PART I.    FINANCIAL INFORMATION

Item 1.   Financial Statements (unaudited).

U.S. PREMIUM BEEF, LLCBalance Sheets(thousands of dollars, except unit information)

Assets	September 26, 2020		December 28, 2019
	(unaudited)
Current assets:
Cash and cash equivalents	$	86,395	$	77,909
Accounts receivable		336		3
Due from affiliates		162		41
Other current assets		7		26
Total current assets		86,900		77,979
Property, plant, and equipment, at cost		243		238
Less accumulated depreciation		207		195
Net property, plant, and equipment		36		43
Right of use assets, net		195		232
Investment in National Beef Packing Company, LLC		163,999		131,786
Other assets		13		43
Total assets	$	251,143	$	210,083
Liabilities and Members' Capital
Current liabilities:
Accounts payable - trade	$	14	$	28
Due to affiliates		32		29
Accrued compensation and benefits		2,416		2,260
Lease obligations		42		49
Other accrued expenses and liabilities		354		1,307
Distributions payable		164		50
Total current liabilities		3,022		3,723
Long-term liabilities:
Lease obligations		153		183
Other liabilities		5,717		3,340
Total long-term liabilities		5,870		3,523
Total liabilities		8,892		7,246
Commitments and contingencies		-		-
Members' capital
Members' contributed capital, 735,385 Class A units and 755,385 Class B units
authorized, issued and outstanding		242,251		202,837
Total members' capital		242,251		202,837
Total liabilities and members' capital	$	251,143	$	210,083
See accompanying notes to financial statements.

1

U.S. PREMIUM BEEF, LLCStatements of Operations(thousands of dollars, except unit and per unit data)

	13 weeks ended						39 weeks ended
	September 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	-		$	-		$	-		$	-
Costs and expenses:
Cost of sales		-			-			-			-
Selling, general, and administrative expenses		4,011			818			6,358			3,509
Depreciation and amortization		4			4			13			13
Total costs and expenses		4,015			822			6,371			3,522
Operating loss		(4,015	)		(822	)		(6,371	)		(3,522	)
Other income:
Interest income		5			258			163			905
Interest expense		-			-			(2	)		(15	)
Equity in income of National Beef Packing Company, LLC		43,014			41,866			158,498			78,823
Other, net		343			48			439			445
Total other income		43,362			42,172			159,098			80,158
Net income	$	39,347		$	41,350		$	152,727		$	76,636
Income per unit:
Basic and diluted
Class A units	$	5.35		$	5.62		$	20.77		$	10.42
Class B units	$	46.88		$	49.27		$	181.97		$	91.31
Outstanding weighted-average Class A and Class B units:
Basic and diluted
Class A units		735,385			735,385			735,385			735,385
Class B units		755,385			755,385			755,385			755,385
See accompanying notes to financial statements.

2

U.S. PREMIUM BEEF, LLCStatements of Cash Flows(thousands of dollars)

	39 weeks ended
	September 26, 2020			September 28, 2019
	(unaudited)			(unaudited)
Cash flows from operating activities:
Net income	$	152,727		$	76,636
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		13			13
Equity in net income of National Beef Packing Company, LLC		(158,498	)		(78,823	)
Distributions from National Beef Packing Company, LLC		126,285			46,296
Changes in assets and liabilities:
Accounts receivable		(333	)		-
Due from affiliates		(121	)		(11	)
Other assets		49			41
Accounts payable		(14	)		(3	)
Due to affiliates		3			(25	)
Accrued compensation and benefits		2,533			(281	)
Other accrued expenses and liabilities		(953	)		(375	)
Net cash provided by operating activities		121,691			43,468
Cash flows from investing activities:
Capital expenditures, including interest capitalized		(6	)		(43	)
Net cash used in investing activities		(6	)		(43	)
Cash flows from financing activities:
Member distributions		(113,199	)		(56,458	)
Net cash used in financing activities		(113,199	)		(56,458	)
Net increase (decrease) in cash		8,486			(13,033	)
Cash and cash equivalents at beginning of period		77,909			88,411
Cash and cash equivalents at end of period	$	86,395		$	75,378
Supplemental noncash disclosures of operating activities:
Right of use assets	$	-		$	243
Supplemental noncash disclosures of financing activities:
Investment in National Beef Packing Company, LLC	$	-		$	23,691
See accompanying notes to financial statements.

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U.S. PREMIUM BEEF, LLC
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(1)   Interim Financial Statements

Basis of Presentation

     The accompanying unaudited 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 using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of 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. For further information, refer to the audited Financial Statements and Notes to Financial  Statements, which are included in the Company’s Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC), for the fiscal year ended December 28, 2019. The results of operations for the interim periods presented are not necessarily indicative of the results for a full fiscal year.

(2)   Accounting Policies

Accounting for Investment in NBP. On December 30, 2011, USPB sold the majority of its ownership interest in NBP to Leucadia. On that date, USPB’s investment in NBP was measured at fair value and has since been carried under the equity method of accounting. USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence but does not have financial or operational control.

     Operating losses, diminished cash flows, economic and industry events, pandemics, such as coronavirus disease (COVID-19), and a variety of other factors may result in a decrease in the value of the investment, which is other than temporary. Such potential decreases in value, if deemed other than temporary, will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units. However, NBP’s plants are all operational at the present time; it has been designated as an essential business during the COVID-19 pandemic; and its results of operations are highly profitable, as reflected in Note 6. As a result, we believe the fair value of our investment in NBP exceeds the carrying value.

Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 26, 2020, the Company’s balance sheet reflected Cash and cash equivalents of $86.4 million.

(3)   Noncompetition Agreements

     The former CEO’s employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. He will continue to receive noncompetition payments of approximately $845,000 per year during calendar years 2020 and 2021.

     The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve-month period following his termination of employment with USPB.

     As of September 26, 2020 and December 28, 2019, the Company had accrued $1.4 million and $1.9 million, respectively, for the noncompetition agreements. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities, respectively, on the balance sheet. The table below summarizes the current and long-term portions of the accrued non-compete amounts (thousands of dollars):

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	September 26, 2020		December 28, 2019
Current non-compete	$	848	$	848
Long-term non-compete		515		1,089
	$	1,363	$	1,937

(4)   Employee Compensation Plans

     In September 2010, USPB’s Board of Directors approved a management phantom unit plan and subsequently awarded phantom units in fiscal years 2010 and 2013. As of September 26, 2020 and December 28, 2019, the Company had accrued $5.7 million and $2.3 million, respectively, for the management phantom awards. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities on the balance sheet.

     USPB provides its employees the opportunity to earn cash incentives and bonuses. As of September 26, 2020 and December 28, 2019, the Company had accrued $1.0 million and $1.4 million, respectively, for the cash incentive and bonus plans. The accrued amounts are included in Accrued compensation and benefits on the balance sheet.

(5)   Earnings Per Unit

     Under the LLC structure, earnings of the Company are to be allocated to unitholders based on their proportionate share of underlying equity. Earnings Per Unit (EPU) has been presented in the accompanying Statements of Operations and in the table that follows.

     Basic EPU excludes dilution and is computed by first allocating a portion of USPB’s net income or net loss to Class A units and the remainder is allocated to Class B units. For the thirteen and thirty-nine week periods ended September 26, 2020 and September 28, 2019, 10% of USPB’s net income was allocated to the Class A’s and 90% to the Class B’s. The net income allocated to the Class A and Class B units were then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit.

Income Per Unit Calculation	13 weeks ended				39 weeks ended
(thousands of dollars, except unit and per unit data)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Basic and diluted earnings per unit:
Income attributable to USPB available to
unitholders (numerator)
Class A	$	3,935	$	4,135	$	15,273	$	7,664
Class B	$	35,412	$	37,215	$	137,454	$	68,972
Weighted average outstanding units (denominator)
Class A		735,385		735,385		735,385		735,385
Class B		755,385		755,385		755,385		755,385
Per unit amount
Class A	$	5.35	$	5.62	$	20.77	$	10.42
Class B	$	46.88	$	49.27	$	181.97	$	91.31

     Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding.

(6)   Investment in National Beef Packing Company, LLC

     USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. The table below summarizes the changes to USPB’s investment in NBP (unaudited) (thousands of dollars):

5

Beginning investment at December 28, 2019	$	131,786
Equity in net income for thirty-nine week period		158,498
Distributions		(126,285	)
Ending investment at September 26, 2020	$	163,999

     Below is a summary of the results of operations for NBP for the thirteen and thirty-nine week periods ended September 26, 2020 and September 28, 2019 (thousands of dollars):

	13 weeks ended						39 weeks ended
	September 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	2,236,299		$	2,249,133		$	7,099,345		$	6,189,854
Costs and expenses:
Cost of sales		1,901,384			1,915,866			5,897,265			5,507,504
Selling, general, and administrative expenses		20,728			20,545			59,961			59,941
Depreciation and amortization		27,142			31,432			80,465			89,049
Total costs and expenses		1,949,254			1,967,843			6,037,691			5,656,494
Operating income		287,045			281,290			1,061,654			533,360
Other income (expense):
Interest income		201			109			337			347
Interest expense		(1,012	)		(2,985	)		(7,582	)		(9,127	)
Income before taxes		286,234			278,414			1,054,409			524,580
Income tax expense		(868	)		(657	)		(2,872	)		(1,637	)
Net income	$	285,366		$	277,757		$	1,051,537		$	522,943
NBP's net income attributable to USPB	$	43,014		$	41,866		$	158,498		$	78,823

(7)   Income Taxes

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

     Although income taxes are assessed to the individual members, USPB is required to withhold state income taxes from the cash distributions it makes to it members. As of September 26, 2020, Other accrued expenses and liabilities on the Company’s balance sheet reflected state taxes payable of $286 thousand.

(8)   Long-term Debt and Loan Agreements

     On July 13, 2020, USPB, and CoBank, ACB (“CoBank”), entered into a Credit Agreement, Amended and Restated Revolving Term Promissory Note (“Promissory Note”), and an Affirmation of Pledge Agreement. The Credit Agreement, Amended and Restated Revolving Term Promissory Note, and Affirmation of Pledge Agreement replace, amend and restate the arrangements between CoBank and USPB contained in that certain Master Loan Agreement, Revolving Term Loan Supplement to the Master Loan Agreement, Pledge Agreement, and Security Agreement dated July 26, 2011, as amended (the “Prior Agreements.”).

     The Credit Agreement and Promissory Note provide for a $1 million Revolving Term Commitment. That commitment carries a term of five years, maturing on June 30, 2025. All of the $1 million revolving credit commitment was available as of September 26, 2020. The Promissory Note defines Interest as equal to the One-Month LIBOR Index Rate or if LIBOR quotes are no longer available, CoBank will replace the LIBOR Index Rate with a replacement benchmark rate. The other terms and conditions of the Master Loan Agreement and the Revolving Term Loan Supplement continue the terms and conditions of the Prior Agreements without material modifications. The Affirmation of Pledge Agreement provides CoBank with a first-priority security interest in USPB’s Membership Interests in, and Distributions from, National Beef Packing Company, LLC.

6

(9)   Members’ Capital

     The following table represents a reconciliation of Members’ Capital for the thirteen and thirty-nine week periods ended September 26, 2020 and September 28, 2019 (unaudited) (thousands of dollars).

Balance at December 28, 2019	$	202,837
Allocation of net income for the thirteen-week period ended March 28, 2020		12,176
Balance at March 28, 2020	$	215,013
Allocation of net income for the thirteen-week period ended June 27, 2020		101,204
Member distributions
Class A ($6.81 per Class A unit)		(5,008	)
Class B ($59.67 per Class B unit)		(45,071	)
Balance at June 27, 2020	$	266,138
Allocation of net income for the thirteen-week period ended September 26, 2020		39,347
Member distributions
Class A ($8.60 per Class A unit)		(6,323	)
Class B ($75.34 Class B unit)		(56,911	)
Balance at September 26, 2020	$	242,251
Balance at December 29, 2018	$	219,756
Allocation of net income for the thirteen-week period ended March 30, 2019		10,538
Member distributions
Class A ($5.00 per Class A unit)		(3,675	)
Class B ($43.78 per Class B unit)		(33,071	)
Balance at March 30, 2019	$	193,548
Allocation of net income for the thirteen-week period ended June 29, 2019		24,748
Member distributions
Class A ($0.90 per Class A unit)		(660	)
Class B ($7.86 per Class B unit)		(5,940	)
Balance at June 29, 2019	$	211,696
Allocation of net income for the thirteen-week period ended September 28, 2019		41,350
Member distributions
Class A ($1.01 per Class A unit)		(742	)
Class B ($8.85 per Class B unit)		(6,683	)
Balance at September 28, 2019	$	245,621

(10)   Legal Proceedings

     USPB is not currently involved in any litigation. However, because its ownership interest in NBP is USPB’s largest asset and because of the cattle procurement and distribution relationship between USPB and NBP, litigation involving NBP may impact USPB.

     NBP is a defendant in four class action lawsuits in the United States District Court, Minnesota District alleging that it violated the Sherman Antitrust Act, the Packers and Stockyards Act, the Commodity Exchange Act, and various state laws (the “Antitrust Cases”). The Antitrust Cases are entitled In re Cattle Antitrust Litigation, which was filed originally on April 23, 2019; Peterson et al. v. JBS USA Food Company Holdings, et al., which was filed originally on April 26, 2019; Samuels v. Cargill, Inc., et al, which was filed originally on April 26, 2019; and Erbert & Gerbert’s, Inc. v. JBS USA Food Company Holdings, et al., which was filed originally on June 18, 2020. The plaintiffs in the Antitrust Cases seek treble damages and other relief under the Sherman Antitrust Act, the Packers & Stockyards Act, the Commodities Exchange Act and attorneys’ fees. NBP is also a defendant in two class action lawsuits filed on January 7, 2020, alleging that it misrepresented the origin of its products in violation of the New Mexico Unfair Practices Act (the “Labelling Cases”). The Labelling Cases are entitled Thornton v. Tyson Foods, Inc., et al., filed in the New Mexico Second Judicial District Court, Bernalillo County, and Lucero v. Tyson Foods, et al., filed in the New Mexico Thirteenth Judicial District Court, Sandoval County. The Labelling Cases were subsequently removed to the United States District Court, New Mexico District. The plaintiffs in the Labelling Cases seek treble damages and other relief and attorneys’ fees. NBP believes it has meritorious defenses to the claims in the Antitrust Cases and the Labelling Cases and intends to defend these cases vigorously. There can be no assurances, however, as to the outcome of these matters or the impact on NBP’s consolidated financial position, results of operations and cash flows.

7

     NBP is a party to various 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 NPB’s financial condition, results of operations or liquidity.

     USPB is not able to assess what impact, if any, the actions described above will have on NBP or USPB.

(11)   Subsequent Events

     USPB has evaluated subsequent events through the date the financial statements were issued and determined there were no such events to report.

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

     The following discussion should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this report.

Disclosure Regarding Forward-Looking Statements

     This report contains “forward-looking statements,” which are subject to a number of risks and uncertainties, many of which are beyond our control. Forward-looking statements are typically identified by the words “believe,” “expect,” “anticipate,” “intend,” “estimate” and similar expressions. Actual results could differ materially from those contemplated by these forward-looking statements as a result of many factors, including economic conditions generally and in our principal markets, the availability and prices of live cattle and commodities, food safety issues, livestock disease, including the identification of cattle with Bovine Spongiform Encephalopathy, product contamination and recall concerns, competitive practices and consolidation in the cattle production and processing industries and among our customers, actions of domestic or foreign governments, hedging risk, changes in interest rates and foreign currency exchange rates, trade barriers and exchange controls, consumer demand and preferences, the costs and risks associated with operations during public health crises, such as the COVID-19 pandemic, the cost of compliance with environmental and health laws, loss of key customers, loss of key employees, labor relations, and consolidation among our customers.

     In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this report will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Please review Part II. Item 1A, Risk Factors, included in this report, for other important factors that could cause actual results to differ materially from those in any such forward-looking statements.

Investment in National Beef Packing Company, LLC

     NBP processes and markets fresh and chilled boxed beef, ground beef, beef by-products, consumer-ready beef and pork, and wet blue leather for domestic and international markets. The largest share of NBP’s revenue is generated from the sale of boxed beef and beef by-products. NBP also generates revenues from value-added production of consumer-ready beef and pork products, wet blue leather and transportation and logistics services.

     NBP has two beef processing facilities located in southwest Kansas and a third facility in central Iowa. In addition, NBP operates one of the largest hide tanning facilities in the world, selling wet blue leather to tanners that produce finished leather for the automotive, luxury goods, apparel and furniture industries. Other streams of revenue include sales through its subsidiary, Kansas City Steak Company, LLC, which sells portioned beef and other products directly to consumers through internet, direct mail and direct response television, a fresh and frozen hamburger manufacturing facility, and service revenues generated by National Carriers, Inc., a wholly owned transportation and logistics company that is one of the largest refrigerated and livestock carrier operations in the U.S. and transports products for NBP and a variety of other customers.

8

     NBP’s profitability typically fluctuates seasonally as well as cyclically, based on the availability of fed cattle. Its profitability is dependent, in large part, on the spread between its cost for live cattle, the primary raw material for its business, and the value received from selling boxed beef and other products coupled with its overall volume. NBP operates in a large and liquid commodity market and it does not have much influence over the price it pays for cattle or the selling price it receives for the products it produces.

     Sales in the thirteen-week period ended September 26, 2020 decreased 0.6%, compared to the same period in 2019, primarily due to lower average selling prices for beef products. Cost of sales decreased 0.8% for the thirteen-week period ended September 26, 2020, as compared to the same period in 2019, primarily due to lower prices for fed cattle, which was partially offset by higher labor costs related to the coronavirus pandemic. The decrease in cost of sales was greater than the decrease in sales, resulting in a 2.7% increase in profitability in the third quarter period, as compared to the same period a year ago.

     Sales in the thirty-nine week period ended September 26, 2020 increased 14.7% in comparison to the same period in 2019, primarily due to higher average selling prices for beef products and the additional volume resulting from the June 2019 acquisition of the Iowa Premium beef processing plant. Cost of sales increased 7.1% for the thirty-nine week period ended September 26, 2020, as compared to the same period in 2019, primarily due to increased volume resulting from the June 2019 acquisition of Iowa Premium beef processing plant, higher incentive costs associated with higher profitability and significantly higher labor costs related to the coronavirus pandemic. Partially offsetting those increases in cost of sales were lower prices for fed cattle. Higher per unit beef processing margins, offset in part lower total volume and higher costs, led to an increase in overall profitability in the 2020 period, as compared to the 2019 period.

     Operating losses, material decreases in cash flows, economic and industry events, pandemics, such as coronavirus disease (COVID-19), and a variety of other factors may result in a decrease in the value of USPB’s investment in NBP, which is other than temporary. Such potential decreases in value, if deemed other than temporary, will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units. However, NBP’s plants are all operational at the present time; it has been designated as an essential business during the COVID-19 pandemic; and its results of operations are highly profitable, as reflected in Note 6. As a result, we believe the fair value of our investment in NBP exceeds the carrying value.

     On June 10, 2019, USPB and NBP entered into the First Amended and Restated Cattle Purchase and Sale Agreement (A&R Agreement) with USPB. The terms and conditions of the A&R Agreement are substantially the same as those of the Cattle Purchase and Sale Agreement dated December 30, 2011. Per the terms and conditions of the A&R Agreement, NBP is required to purchase through USPB from its owners and associates, and USPB is required to sell and deliver from its owners and associates to NBP, a base amount of 735,385 (subject to adjustment) head of cattle per year with prices based on those published by the U.S. Department of Agriculture, subject to adjustments for cattle performance. NBP obtained approximately 24% and 24% of its cattle requirements under this agreement during the thirty-nine weeks ended September 26, 2020 and September 28, 2019, respectively.

USPB Results of Operations

Thirteen weeks ended September 26, 2020 compared to thirteen weeks ended September 28, 2019

Net Sales. There were no net sales in the thirteen-week periods ended September 26, 2020 and September 28, 2019.

Cost of Sales. There were no cost of sales in the thirteen-week periods ended September 26, 2020 and September 28, 2019.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $4.0 million and $0.8 million for the thirteen-week periods ended September 26, 2020 and September 28, 2019, respectively, an increase of $3.2 million. The increase was primarily the result of higher phantom plan expenses, which increased due to higher unit transfer prices.

9

Operating Loss. Operating loss was $4.0 million and $0.8 million for the thirteen-week periods ended September 26, 2020 and September 28, 2019, respectively.

Equity in Net Income of National Beef Packing Company, LLC. Equity in NBP net income was $43.0 million and $41.9 million for the thirteen-week periods ended September 26, 2020 and September 28, 2019, respectively. The increase in fiscal year 2020 is due to lower depreciation expense, lower interest expense and higher margins at NBP. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Interest Income. Interest income was less than $0.1 million and $0.3 million for the thirteen-week periods ended September 26, 2020 and September 28, 2019, respectively. The decrease is due to lower interest rates.

Other, net. Other income was $0.3 million and less than $0.1 million for the thirteen-week periods ended September 26, 2020 and September 28, 2019, respectively. The increase is primarily due to higher delivery right lease income.

Net income. Net income was $39.3 million and $41.4 million for the thirteen-week periods ended September 26, 2020 and September 28, 2019, respectively.

Thirty-nine weeks ended September 26, 2020 compared to thirty-nine weeks ended September 28, 2019

Net Sales. There were no net sales in the thirty-nine week periods ended September 26, 2020 and September 28, 2019.

Cost of Sales. There were no cost of sales in the thirty-nine week periods ended September 26, 2020 and September 28, 2019.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $6.4 million and $3.5 million for the thirty-nine week periods ended September 26, 2020 and September 28, 2019, respectively, an increase of approximately $2.9 million. The increase was primarily the result of higher phantom plan expenses, which increased due to higher unit transfer prices.

Operating Loss. Operating loss was $6.4 million and $3.5 million for the thirty-nine week periods ended September 26, 2020 and September 28, 2019, respectively.

Equity in Net Income of National Beef Packing Company, LLC. Equity in NBP net income was $158.5 million and $78.8 million for the thirty-nine week periods ended September 26, 2020 and September 28, 2019, respectively. The increase in fiscal year 2020 is primarily due to significantly higher gross margins at NBP. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Interest Income. Interest income was $0.2 million and $0.9 million for the thirty-nine week periods ended September 26, 2020 and September 28, 2019, respectively. The decrease is due to lower interest rates.

Other, net. Other income was less than $0.4 million and $0.4 million for the thirty-nine week periods ended September 26, 2020 and September 28, 2019, respectively.

Net income. Net income was $152.7 million and $76.6 million for the thirty-nine week periods ended September 26, 2020 and September 28, 2019, respectively.

Liquidity and Capital Resources

     As of September 26, 2020, we had net working capital (the excess of current assets over current liabilities) of approximately $83.9 million, which included cash and cash equivalents of $86.4 million. As of December 28, 2019, we had net working capital of approximately $74.3 million, which included cash and cash equivalents of $77.9 million. Our primary sources of liquidity for the first three quarters of fiscal years 2020 and 2019 were cash and available borrowings under the Credit Agreement and Master Loan Agreement with CoBank.

10

     USPB’s Amended and Restated Revolving Term Supplement’s maturity date was June 30, 2020. On June 24, 2020, CoBank unilaterally extended the Term Expiration Date under USPB’s Amended and Restated Revolving Term Supplement from June 30, 2020 up to and including August 31, 2020. On July 13, 2020, USPB, and CoBank, ACB (“CoBank”), entered into a Credit Agreement, Amended and Restated Revolving Term Promissory Note (“Promissory Note”), and an Affirmation of Pledge Agreement (“New Loan Agreements”). The New Loan Agreements replace, amend and restate the arrangements between CoBank and USPB contained in that certain Master Loan Agreement, Revolving Term Loan Supplement to the Master Loan Agreement, Pledge Agreement, and Security Agreement dated July 26, 2011, as amended.

     The New Loan Agreements provide for a $1 million Revolving Term Commitment. That commitment carries a term of five years, maturing on June 30, 2025. The Promissory Note defines Interest as equal to the One-Month LIBOR Index Rate or if LIBOR quotes are no longer available, CoBank will replace the LIBOR Index Rate with a replacement benchmark rate. The other terms and conditions of the Master Loan Agreement and the Revolving Term Loan Supplement continue the terms and conditions of the Prior Agreements without material modifications. The Affirmation of Pledge Agreement provides CoBank with a first-priority security interest in USPB’s Membership Interests in, and Distributions from, National Beef Packing Company, LLC.

     All of the $1 million revolving credit commitment was available as of September 26, 2020. Borrowings under the revolving credit commitment currently bear interest at the base rate or LIBOR rate plus applicable margin. The applicable margin over LIBOR was 200 bps at September 26, 2020. USPB was in compliance with the financial covenant under its Credit Agreement as of September 26, 2020.

     On December 30, 2011, in connection with the closing of the Leucadia Transaction, the Company and CoBank entered into the Consent and First Amendment to Pledge Agreement and Security Agreement, by which CoBank agreed to (i) consent to the Membership Interest Sale and the PA Distribution, (ii) release its security interest in, and liens on, the Membership Interests being sold pursuant to the Membership Interest Sale, (iii) consent to the NBP Pledge and (iv) consent to the amendments and restatements of the NBP Operating Agreement and the PA Newco Operating Agreement. The NBP Pledge grants NBP a perfected security interest in and to USPB’s membership interests in, and distributions from, NBP, subject only to the prior first priority security interest held by CoBank.

     We believe our cash will be sufficient to support our cash needs for the foreseeable future. For a review of our obligations that affect liquidity, please see the “Cash Payment Obligations” table in “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for fiscal year 2019.

Operating Activities

     Net cash provided by operating activities in the thirty-nine weeks ended September 26, 2020 was approximately $121.7 million compared to approximately $43.5 million in the thirty-nine weeks ended September 28, 2019. The $78.2 million change was primarily due to higher distributions from National Beef.

Investing Activities

     Net cash used in investing activities in the thirty-nine week periods ended September 26, 2020 and September 28, 2019 were less than $0.1 million.

Financing Activities

     Net cash used in financing activities was $113.2 million in the thirty-nine weeks ended September 26, 2020 compared to $56.5 million in the thirty-nine weeks ended September 28, 2019. The change was due to higher member distributions in fiscal year 2020.

11

Item 3.   Quantitative and Qualitative Disclosures about Market Risk.

     The principal market risks affecting USPB’s business are exposure to interest rate risk, to the extent the Company has debt outstanding. As of September 26, 2020, the Company did not have any outstanding debt.

Item 4.   Controls and Procedures.

     We maintain a system of controls and procedures designed to provide reasonable assurance as to the reliability of the 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 Financial 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 Financial 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 thirty-nine weeks ended September 26, 2020 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.

     USPB is not currently involved in any litigation. However, because its ownership interest in NBP is USPB’s largest asset and because of the cattle procurement and distribution relationship between USPB and NBP, litigation involving NBP may impact USPB.

     NBP is a defendant in four class action lawsuits in the United States District Court, Minnesota District alleging that it violated the Sherman Antitrust Act, the Packers and Stockyards Act, the Commodity Exchange Act, and various state laws (the “Antitrust Cases”). The Antitrust Cases are entitled In re Cattle Antitrust Litigation, which was filed originally on April 23, 2019; Peterson et al. v. JBS USA Food Company Holdings, et al., which was filed originally on April 26, 2019; Samuels v. Cargill, Inc., et al, which was filed originally on April 26, 2019; and Erbert & Gerbert’s, Inc. v. JBS USA Food Company Holdings, et al., which was filed originally on June 18, 2020. The plaintiffs in the Antitrust Cases seek treble damages and other relief under the Sherman Antitrust Act, the Packers & Stockyards Act, the Commodities Exchange Act and attorneys’ fees. NBP is also a defendant in two class action lawsuits filed on January 7, 2020, alleging that it misrepresented the origin of its products in violation of the New Mexico Unfair Practices Act (the “Labelling Cases”). The Labelling Cases are entitled Thornton v. Tyson Foods, Inc., et al., filed in the New Mexico Second Judicial District Court, Bernalillo County, and Lucero v. Tyson Foods, et al., filed in the New Mexico Thirteenth Judicial District Court, Sandoval County. The Labelling Cases were subsequently removed to the United States District Court, New Mexico District. The plaintiffs in the Labelling Cases seek treble damages and other relief and attorneys’ fees. NBP believes it has meritorious defenses to the claims in the Antitrust Cases and the Labelling Cases and intends to defend these cases vigorously. There can be no assurances, however, as to the outcome of these matters or the impact on NBP’s consolidated financial position, results of operations and cash flows.

     NBP is a party to various 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 NPB’s financial condition, results of operations or liquidity.

     USPB is not able to assess what impact, if any, the actions described above will have on NBP or USPB.

12

Item 1A.   Risk Factors.

     Except for the risk factors discussed below, the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 28, 2019 have not materially changed. Please refer to the Company’s report on Form 10-K for the fiscal year ended December 28, 2019 to consider those risk factors.

USPB’s investment in NBP could become impaired.

     USPB’s investment in NBP is carried under the equity method of accounting. Although NBP’s results from operations are currently highly profitable, pandemic events such as COVID-19, industry trends, and other economic factors could have a negative impact on NBP’s operations and cash flows. As a result, the fair market value of USPB’s investment in NBP could decrease to a level that is less than the carrying value. If such situation is deemed to not be temporary, USPB would record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units.

If the COVID-19 pandemic adversely affects NBP’s ability to keep the cattle slaughter at normal levels, the ability of USPB members to deliver cattle for processing based on their ownership of Class A units may be impacted.

     COVID-19 temporarily caused NBP to reduce fed cattle slaughter at several of its beef processing plants. If NBP is unable to maintain the slaughter at normal levels for an extended period, USPB members may be delayed in delivering their cattle or may be required to deliver to a different NBP processing plant. As the right and obligation to deliver cattle is associated with ownership of USPB’s Class A units, such a result may impact the value or liquidity of Class A units.

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

     None.

Item 3.   Defaults Upon Senior Securities.

     None.

Item 4.   Mine Safety Disclosures.

     Not applicable.

Item 5.   Other Information.

     None.

Item 6.   Exhibits.

10.5	(a)	Credit Agreement between U.S. Premium Beef, LLC and CoBank, ACB, executed July 13, 2020 (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 333-115164) filed with the SEC on July 16, 2020).
10.5	(b)	Amended and Restated Revolving Term Promissory Note between U.S. Premium Beef, LLC and CoBank, ACB executed July 13, 2020 (incorporated by reference to Exhibit 10.2 to Form 8-K (File No. 333-115164) filed with the SEC on July 16, 2020).
10.5	(c)	Affirmation of Pledge Agreement between U.S. Premium Beef, LLC and CoBank, ACB executed July 13, 2020 (incorporated by reference to Exhibit 10.3 to Form 8-K (File No. 333-115164) filed with the SEC on July 16, 2020).
31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

13

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101	.INS	XBRL Instance Document **
101	.SCH	XBRL Taxonomy Extension Schema Document **
101	.CAL	XBRL Taxonomy Extension Calculation Linkbase **
101	.DEF	XBRL Taxonomy Extension Definition Linkbase Document **
101	.LAB	XBRL Taxonomy Extension Label Linkbase Document **
101	.PRE	XBRL Taxonomy Extension Presentation Linkbase Document **

** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

14

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/ Stanley D. Linville
	Stanley D. Linville
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Scott J. Miller
	Scott J. Miller
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Date: November 6, 2020

15

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Stanley D. Linville, certify that:

      1. I have reviewed this quarterly report on Form 10-Q of U.S. Premium Beef, LLC;

     2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Stanley D. Linville
	Stanley D. Linville
	Chief Executive Officer

Date: November 6, 2020

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Scott J. Miller, certify that:

      1. I have reviewed this quarterly report on Form 10-Q of U.S. Premium Beef, LLC;

     2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

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

Date: November 6, 2020

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In connection with the Quarterly Report of U.S. Premium Beef, LLC (the Company) on Form 10-Q for the period ended September 26, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Stanley D. Linville, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Stanley D. Linville
	Stanley D. Linville
	Chief Executive Officer

Date: November 6, 2020

EX-32.2

EXHIBIT 32.2

CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In connection with the Quarterly Report of U.S. Premium Beef, LLC (the Company) on Form 10-Q for the period ended September 26, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Scott J. Miller, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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

Date: November 6, 2020

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 26, 2020	Oct. 31, 2020
Entity Registrant Name	U. S. Premium Beef, LLC
Entity Central Index Key	0001289237
Document Type	10-Q
Document Period End Date	Sep. 26, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-26
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Entity Emerging Growth	false
Entity Small Business	false
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity File Number	333-115164
Entity Incorporation, State Country Code	DE
Class A Units [Member]
Entity Common Stock, Shares Outstanding		735,385
Class B Units [Member]
Entity Common Stock, Shares Outstanding		755,385

XML

Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Current assets:
Cash and cash equivalents	$ 86,395	$ 77,909
Accounts receivable	336	3
Due from affiliates	162	41
Other current assets	7	26
Total current assets	86,900	77,979
Property, plant, and equipment, at cost	243	238
Less accumulated depreciation	207	195
Net property, plant, and equipment	36	43
Right of use assets, net	195	232
Investment in National Beef Packing Company, LLC	163,999	131,786
Other assets	13	43
Total assets	251,143	210,083
Current liabilities:
Accounts payable - trade	14	28
Due to affiliates	32	29
Accrued compensation and benefits	2,416	2,260
Lease obligations	42	49
Other accrued expenses and liabilities	354	1,307
Distributions payable	164	50
Total current liabilities	3,022	3,723
Long-term liabilities:
Lease obligations	153	183
Other liabilities	5,717	3,340
Total long-term liabilities	5,870	3,523
Total liabilities	8,892	7,246
Commitments and contingencies
Members' capital
Members' contributed capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding	242,251	202,837
Total members' capital	242,251	202,837
Total liabilities and members' capital	$ 251,143	$ 210,083

XML

Balance Sheets (Unaudited) (Parenthetical) - shares	Sep. 26, 2020	Dec. 28, 2019
Class A Units [Member]
Members' capital, units authorized	735,385	735,385
Members' capital, units issued	735,385	735,385
Members' capital, units outstanding	735,385	735,385
Class B Units [Member]
Members' capital, units authorized	755,385	755,385
Members' capital, units issued	755,385	755,385
Members' capital, units outstanding	755,385	755,385

XML

Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Net sales	$ 0	$ 0	$ 0	$ 0
Costs and expenses:
Cost of sales	0	0	0	0
Selling, general, and administrative expenses	4,011	818	6,358	3,509
Depreciation and amortization	4	4	13	13
Total costs and expenses	4,015	822	6,371	3,522
Operating loss	(4,015)	(822)	(6,371)	(3,522)
Other income :
Interest income	5	258	163	905
Interest expense	0	0	(2)	(15)
Equity in income of National Beef Packing Company, LLC	43,014	41,866	158,498	78,823
Other, net	343	48	439	445
Total other income	43,362	42,172	159,098	80,158
Net income	$ 39,347	$ 41,350	$ 152,727	$ 76,636
Class A Units [Member]
Income per unit:
Basic and diluted	$ 5.35	$ 5.62	$ 20.77	$ 10.42
Outstanding weighted-average Class A and Class B units:
Basic and diluted	735,385	735,385	735,385	735,385
Class B Units [Member]
Income per unit:
Basic and diluted	$ 46.88	$ 49.27	$ 181.97	$ 91.31
Outstanding weighted-average Class A and Class B units:
Basic and diluted	755,385	755,385	755,385	755,385

XML

Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019
Cash flows from operating activities:
Net income	$ 152,727	$ 76,636
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	13	13
Equity in net income of National Beef Packing Company, LLC	(158,498)	(78,823)
Distributions from National Beef Packing Company, LLC	126,285	46,296
Changes in assets and liabilities:
Accounts receivable	(333)	0
Due from affiliates	(121)	(11)
Other assets	49	41
Accounts payable	(14)	(3)
Due to affiliates	3	(25)
Accrued compensation and benefits	2,533	(281)
Other accrued expenses and liabilities	(953)	(375)
Net cash used in operating activities	121,691	43,468
Cash flows from investing activities:
Capital expenditures, including interest capitalized	(6)	(43)
Net cash used in investing activities	(6)	(43)
Cash flows from financing activities:
Member distributions	(113,199)	(56,458)
Net cash used in financing activities	(113,199)	(56,458)
Net increase (decrease) in cash	8,486	(13,033)
Cash and cash equivalents at beginning of period	77,909	88,411
Cash and cash equivalents at end of period	86,395	75,378
Supplemental noncash disclosures of operating activities:
Right of use assets	0	243
Supplemental Noncash Disclosures Of Investing Activities:
Investment in National Beef Packing Company, LLC	$ 0	$ 23,691

XML

1. Interim Financial Statements

9 Months Ended

Sep. 26, 2020

Quarterly Financial Information Disclosure [Abstract]

Interim Financial Statements

(1)   Interim Financial Statements

Basis of Presentation

     The accompanying unaudited 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 using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of 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. For further information, refer to the audited Financial Statements and Notes to Financial Statements, which are included in the Company’s Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC), for the fiscal year ended December 28, 2019. The results of operations for the interim periods presented are not necessarily indicative of the results for a full fiscal year.

XML

2. Accounting Policies

9 Months Ended

Sep. 26, 2020

Accounting Policies [Abstract]

Accounting Policies

(2)   Accounting Policies

     Accounting for Investment in NBP. On December 30, 2011, USPB sold the majority of its ownership interest in NBP to Leucadia. On that date, USPB’s investment in NBP was measured at fair value and has since been carried under the equity method of accounting. USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence but does not have financial or operational control.

     Operating losses, diminished cash flows, economic and industry events, pandemics, such as coronavirus disease (COVID-19), and a variety of other factors may result in a decrease in the value of the investment, which is other than temporary. Such potential decreases in value, if deemed other than temporary, will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units. However, NBP’s plants are all operational at the present time; it has been designated as an essential business during the COVID-19 pandemic; and its results of operations are highly profitable, as reflected in Note 6. As a result, we believe the fair value of our investment in NBP exceeds the carrying value.

     Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 26, 2020, the Company’s balance sheet reflected Cash and cash equivalents of $86.4 million.

XML

3. Noncompetition Agreements

9 Months Ended

Sep. 26, 2020

Compensation Related Costs [Abstract]

Noncompetition Agreements

(3)   Noncompetition Agreements

     The former CEO’s employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. He will continue to receive noncompetition payments of approximately $845,000 per year during calendar years 2020 and 2021.

     The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve-month period following his termination of employment with USPB.

     As of September 26, 2020 and December 28, 2019, the Company had accrued $1.4 million and $1.9 million, respectively, for the noncompetition agreements. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities, respectively, on the balance sheet. The table below summarizes the current and long-term portions of the accrued non-compete amounts (thousands of dollars):

	September 26, 2020		December 28, 2019
Current non-compete	$	848	$	848
Long-term non-compete		515		1,089
	$	1,363	$	1,937

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4. Employee Compensation Plans

9 Months Ended

Sep. 26, 2020

Retirement Benefits [Abstract]

Employee Compensation Plans

(4)   Employee Compensation Plans

     In September 2010, USPB’s Board of Directors approved a management phantom unit plan and subsequently awarded phantom units in fiscal years 2010 and 2013. As of September 26, 2020 and December 28, 2019, the Company had accrued $5.7 million and $2.3 million, respectively, for the management phantom awards. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities on the balance sheet.

     USPB provides its employees the opportunity to earn cash incentives and bonuses. As of September 26, 2020 and December 28, 2019, the Company had accrued $1.0 million and $1.4 million, respectively, for the cash incentive and bonus plans. The accrued amounts are included in Accrued compensation and benefits on the balance sheet.

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5. Earnings Per Unit

9 Months Ended

Sep. 26, 2020

Earnings Per Share [Abstract]

Schedule of Income (Loss) Per Unit Calculation

(5)   Earnings Per Unit

     Under the LLC structure, earnings of the Company are to be allocated to unitholders based on their proportionate share of underlying equity. Earnings Per Unit (EPU) has been presented in the accompanying Statements of Operations and in the table that follows.

     Basic EPU excludes dilution and is computed by first allocating a portion of USPB’s net income or net loss to Class A units and the remainder is allocated to Class B units. For the thirteen and thirty-nine week periods ended September 26, 2020 and September 28, 2019, 10% of USPB’s net income was allocated to the Class A’s and 90% to the Class B’s. The net income allocated to the Class A and Class B units were then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit.

Income Per Unit Calculation	13 weeks ended				39 weeks ended
(thousands of dollars, except unit and per unit data)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Basic and diluted earnings per unit:
Income attributable to USPB available to
unitholders (numerator)
Class A	$	3,935	$	4,135	$	15,273	$	7,664
Class B	$	35,412	$	37,215	$	137,454	$	68,972
Weighted average outstanding units (denominator)
Class A		735,385		735,385		735,385		735,385
Class B		755,385		755,385		755,385		755,385
Per unit amount
Class A	$	5.35	$	5.62	$	20.77	$	10.42
Class B	$	46.88	$	49.27	$	181.97	$	91.31

     Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding.

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6. Investment in National Beef Packing Company, LLC

9 Months Ended

Sep. 26, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investment in National Beef Packing Company, LLC

(6)   Investment in National Beef Packing Company, LLC

     USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. The table below summarizes the changes to USPB’s investment in NBP (unaudited) (thousands of dollars):

Beginning investment at December 28, 2019	$	131,786
Equity in net income for thirty-nine week period		158,498
Distributions		(126,285	)
Ending investment at September 26, 2020	$	163,999

     Below is a summary of the results of operations for NBP for the thirteen and thirty-nine week periods ended September 26, 2020 and September 28, 2019 (thousands of dollars):

	13 weeks ended						39 weeks ended
	September 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	2,236,299		$	2,249,133		$	7,099,345		$	6,189,854
Costs and expenses:
Cost of sales		1,901,384			1,915,866			5,897,265			5,507,504
Selling, general, and administrative expenses		20,728			20,545			59,961			59,941
Depreciation and amortization		27,142			31,432			80,465			89,049
Total costs and expenses		1,949,254			1,967,843			6,037,691			5,656,494
Operating income		287,045			281,290			1,061,654			533,360
Other income (expense):
Interest income		201			109			337			347
Interest expense		(1,012	)		(2,985	)		(7,582	)		(9,127	)
Income before taxes		286,234			278,414			1,054,409			524,580
Income tax expense		(868	)		(657	)		(2,872	)		(1,637	)
Net income	$	285,366		$	277,757		$	1,051,537		$	522,943
NBP's net income attributable to USPB	$	43,014		$	41,866		$	158,498		$	78,823

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7. Income Taxes

9 Months Ended

Sep. 26, 2020

Income Tax Disclosure [Abstract]

Income Taxes

(7)   Income Taxes

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

     Although income taxes are assessed to the individual members, USPB is required to withhold state income taxes from the cash distributions it makes to it members. As of September 26, 2020, Other accrued expenses and liabilities on the Company’s balance sheet reflected state taxes payable of $286 thousand.

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8. Long-term Debt and Loan Agreements

9 Months Ended

Sep. 26, 2020

Debt Disclosure [Abstract]

Long-term Debt and Loan Agreements

(8)   Long-term Debt and Loan Agreements

     On July 13, 2020, USPB, and CoBank, ACB (“CoBank”), entered into a Credit Agreement, Amended and Restated Revolving Term Promissory Note (“Promissory Note”), and an Affirmation of Pledge Agreement. The Credit Agreement, Amended and Restated Revolving Term Promissory Note, and Affirmation of Pledge Agreement replace, amend and restate the arrangements between CoBank and USPB contained in that certain Master Loan Agreement, Revolving Term Loan Supplement to the Master Loan Agreement, Pledge Agreement, and Security Agreement dated July 26, 2011, as amended (the “Prior Agreements.”).

     The Credit Agreement and Promissory Note provide for a $1 million Revolving Term Commitment. That commitment carries a term of five years, maturing on June 30, 2025. All of the $1 million revolving credit commitment was available as of September 26, 2020. The Promissory Note defines Interest as equal to the One-Month LIBOR Index Rate or if LIBOR quotes are no longer available, CoBank will replace the LIBOR Index Rate with a replacement benchmark rate. The other terms and conditions of the Master Loan Agreement and the Revolving Term Loan Supplement continue the terms and conditions of the Prior Agreements without material modifications. The Affirmation of Pledge Agreement provides CoBank with a first-priority security interest in USPB’s Membership Interests in, and Distributions from, National Beef Packing Company, LLC.

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9. Members' Capital

9 Months Ended

Sep. 26, 2020

Members' Equity [Abstract]

Members' Capital

(9)   Members’ Capital

     The following table represents a reconciliation of Members’ Capital for the thirteen and thirty-nine week periods ended September 26, 2020 and September 28, 2019 (unaudited) (thousands of dollars).

Balance at December 28, 2019	$	202,837
Allocation of net income for the thirteen-week period ended March 28, 2020		12,176
Balance at March 28, 2020	$	215,013
Allocation of net income for the thirteen-week period ended June 27, 2020		101,204
Member distributions
Class A ($6.81 per Class A unit)		(5,008	)
Class B ($59.67 per Class B unit)		(45,071	)
Balance at June 27, 2020	$	266,138
Allocation of net income for the thirteen-week period ended September 26, 2020		39,347
Member distributions
Class A ($8.60 per Class A unit)		(6,323	)
Class B ($75.34 Class B unit)		(56,911	)
Balance at September 26, 2020	$	242,251
Balance at December 29, 2018	$	219,756
Allocation of net income for the thirteen-week period ended March 30, 2019		10,538
Member distributions
Class A ($5.00 per Class A unit)		(3,675	)
Class B ($43.78 per Class B unit)		(33,071	)
Balance at March 30, 2019	$	193,548
Allocation of net income for the thirteen-week period ended June 29, 2019		24,748
Member distributions
Class A ($0.90 per Class A unit)		(660	)
Class B ($7.86 per Class B unit)		(5,940	)
Balance at June 29, 2019	$	211,696
Allocation of net income for the thirteen-week period ended September 28, 2019		41,350
Member distributions
Class A ($1.01 per Class A unit)		(742	)
Class B ($8.85 per Class B unit)		(6,683	)
Balance at September 28, 2019	$	245,621

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10. Legal Proceedings

9 Months Ended

Sep. 26, 2020

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

(10)   Legal Proceedings

     USPB is not currently involved in any litigation. However, because its ownership interest in NBP is USPB’s largest asset and because of the cattle procurement and distribution relationship between USPB and NBP, litigation involving NBP may impact USPB.

     NBP is a defendant in four class action lawsuits in the United States District Court, Minnesota District alleging that it violated the Sherman Antitrust Act, the Packers and Stockyards Act, the Commodity Exchange Act, and various state laws (the “Antitrust Cases”). The Antitrust Cases are entitled In re Cattle Antitrust Litigation, which was filed originally on April 23, 2019; Peterson et al. v. JBS USA Food Company Holdings, et al., which was filed originally on April 26, 2019; Samuels v. Cargill, Inc., et al, which was filed originally on April 26, 2019; and Erbert & Gerbert’s, Inc. v. JBS USA Food Company Holdings, et al., which was filed originally on June 18, 2020. The plaintiffs in the Antitrust Cases seek treble damages and other relief under the Sherman Antitrust Act, the Packers & Stockyards Act, the Commodities Exchange Act and attorneys’ fees. NBP is also a defendant in two class action lawsuits filed on January 7, 2020, alleging that it misrepresented the origin of its products in violation of the New Mexico Unfair Practices Act (the “Labelling Cases”). The Labelling Cases are entitled Thornton v. Tyson Foods, Inc., et al., filed in the New Mexico Second Judicial District Court, Bernalillo County, and Lucero v. Tyson Foods, et al., filed in the New Mexico Thirteenth Judicial District Court, Sandoval County. The Labelling Cases were subsequently removed to the United States District Court, New Mexico District. The plaintiffs in the Labelling Cases seek treble damages and other relief and attorneys’ fees. NBP believes it has meritorious defenses to the claims in the Antitrust Cases and the Labelling Cases and intends to defend these cases vigorously. There can be no assurances, however, as to the outcome of these matters or the impact on NBP’s consolidated financial position, results of operations and cash flows.

     NBP is a party to various 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 NPB’s financial condition, results of operations or liquidity.

     USPB is not able to assess what impact, if any, the actions described above will have on NBP or USPB.

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11. Subsequent Events

9 Months Ended

Sep. 26, 2020

Subsequent Events [Abstract]

Subsequent Events

(11)   Subsequent Events

     USPB has evaluated subsequent events through the date the financial statements were issued and determined there were no such events to report.

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2. Accounting Policies (Policies)

9 Months Ended

Sep. 26, 2020

Accounting Policies [Abstract]

Accounting for Investment in NBP

     Accounting for Investment in NBP. On December 30, 2011, USPB sold the majority of its ownership interest in NBP to Leucadia. On that date, USPB’s investment in NBP was measured at fair value and has since been carried under the equity method of accounting. USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence but does not have financial or operational control.

     Operating losses, diminished cash flows, economic and industry events, pandemics, such as coronavirus disease (COVID-19), and a variety of other factors may result in a decrease in the value of the investment, which is other than temporary. Such potential decreases in value, if deemed other than temporary, will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units. However, NBP’s plants are all operational at the present time; it has been designated as an essential business during the COVID-19 pandemic; and its results of operations are highly profitable, as reflected in Note 6. As a result, we believe the fair value of our investment in NBP exceeds the carrying value.

Cash and Cash Equivalents

     Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 26, 2020, the Company’s balance sheet reflected Cash and cash equivalents of $86.4 million.

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3. Noncompetition Agreements (Tables)

9 Months Ended

Sep. 26, 2020

Compensation Related Costs [Abstract]

Schedule of non-compete amounts

The table below summarizes the current and long-term portions of the accrued non-compete amounts (thousands of dollars):

	September 26, 2020		December 28, 2019
Current non-compete	$	848	$	848
Long-term non-compete		515		1,089
	$	1,363	$	1,937

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5. Earnings Per Unit (Tables)

9 Months Ended

Sep. 26, 2020

Earnings Per Share [Abstract]

Reconciliation of earnings per unit

Income Per Unit Calculation	13 weeks ended				39 weeks ended
(thousands of dollars, except unit and per unit data)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Basic and diluted earnings per unit:
Income attributable to USPB available to
unitholders (numerator)
Class A	$	3,935	$	4,135	$	15,273	$	7,664
Class B	$	35,412	$	37,215	$	137,454	$	68,972
Weighted average outstanding units (denominator)
Class A		735,385		735,385		735,385		735,385
Class B		755,385		755,385		755,385		755,385
Per unit amount
Class A	$	5.35	$	5.62	$	20.77	$	10.42
Class B	$	46.88	$	49.27	$	181.97	$	91.31

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6. Investment in National Beef Packing Company, LLC (Tables)

9 Months Ended

Sep. 26, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investment roll forward

The table below summarizes the changes to USPB’s investment in NBP (unaudited) (thousands of dollars):

Beginning investment at December 28, 2019	$	131,786
Equity in net income for thirty-nine week period		158,498
Distributions		(126,285	)
Ending investment at September 26, 2020	$	163,999

Schedule of Operations for NBP

     Below is a summary of the results of operations for NBP for the thirteen and thirty-nine week periods ended September 26, 2020 and September 28, 2019 (thousands of dollars):

	13 weeks ended						39 weeks ended
	September 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	2,236,299		$	2,249,133		$	7,099,345		$	6,189,854
Costs and expenses:
Cost of sales		1,901,384			1,915,866			5,897,265			5,507,504
Selling, general, and administrative expenses		20,728			20,545			59,961			59,941
Depreciation and amortization		27,142			31,432			80,465			89,049
Total costs and expenses		1,949,254			1,967,843			6,037,691			5,656,494
Operating income		287,045			281,290			1,061,654			533,360
Other income (expense):
Interest income		201			109			337			347
Interest expense		(1,012	)		(2,985	)		(7,582	)		(9,127	)
Income before taxes		286,234			278,414			1,054,409			524,580
Income tax expense		(868	)		(657	)		(2,872	)		(1,637	)
Net income	$	285,366		$	277,757		$	1,051,537		$	522,943
NBP's net income attributable to USPB	$	43,014		$	41,866		$	158,498		$	78,823

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9. Members' Capital (Tables)

9 Months Ended

Sep. 26, 2020

Members' Equity [Abstract]

Schedule of Reconciliation of Members' Capital

     The following table represents a reconciliation of Members’ Capital for the thirteen and thirty-nine week periods ended September 26, 2020 and September 28, 2019 (unaudited) (thousands of dollars).

Balance at December 28, 2019	$	202,837
Allocation of net income for the thirteen-week period ended March 28, 2020		12,176
Balance at March 28, 2020	$	215,013
Allocation of net income for the thirteen-week period ended June 27, 2020		101,204
Member distributions
Class A ($6.81 per Class A unit)		(5,008	)
Class B ($59.67 per Class B unit)		(45,071	)
Balance at June 27, 2020	$	266,138
Allocation of net income for the thirteen-week period ended September 26, 2020		39,347
Member distributions
Class A ($8.60 per Class A unit)		(6,323	)
Class B ($75.34 Class B unit)		(56,911	)
Balance at September 26, 2020	$	242,251
Balance at December 29, 2018	$	219,756
Allocation of net income for the thirteen-week period ended March 30, 2019		10,538
Member distributions
Class A ($5.00 per Class A unit)		(3,675	)
Class B ($43.78 per Class B unit)		(33,071	)
Balance at March 30, 2019	$	193,548
Allocation of net income for the thirteen-week period ended June 29, 2019		24,748
Member distributions
Class A ($0.90 per Class A unit)		(660	)
Class B ($7.86 per Class B unit)		(5,940	)
Balance at June 29, 2019	$	211,696
Allocation of net income for the thirteen-week period ended September 28, 2019		41,350
Member distributions
Class A ($1.01 per Class A unit)		(742	)
Class B ($8.85 per Class B unit)		(6,683	)
Balance at September 28, 2019	$	245,621

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2. Accounting Policies (Details Narrative) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019	Sep. 28, 2019	Dec. 29, 2018
Accounting Policies [Abstract]
Cash and cash equivalents	$ 86,395	$ 77,909	$ 75,378	$ 88,411

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3. Noncompetition Agreements (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Compensation Related Costs [Abstract]
Current non-compete	$ 848	$ 848
Long-term non-compete	515	1,089
Total non-compete	$ 1,363	$ 1,937

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3. Noncompetition Agreements (Details Narrative) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Compensation Related Costs [Abstract]
Noncompetition payment payable year one	$ 845
Noncompetition payment payable year two	845
Accrued Noncompetition Payments	$ 1,400	$ 1,900

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4. Employee Options and Benefit Plans (Details Narrative) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Accrued compensation and benefits	$ 2,416	$ 2,260
Management Phantom Unit Plan [Member]
Accrued liabilities	5,700	2,300
Cash Incentive And Bonus Plans [Member]
Accrued compensation and benefits	$ 1,000	$ 1,400

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5. Earnings Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 26, 2020	Jun. 27, 2020	Mar. 28, 2020	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Sep. 26, 2020	Sep. 28, 2019
Basic and diluted earnings per unit:
Income attributable to USPB available to unitholders (numerator)	$ 39,347	$ 101,204	$ 12,176	$ 24,748	$ 24,748	$ 10,538
Class A Units [Member]
Basic and diluted earnings per unit:
Income attributable to USPB available to unitholders (numerator)	$ 3,935			$ 4,135			$ 15,273	$ 7,664
Weighted average outstanding units (denominator)	735,385			735,385			735,385	735,385
Per unit amount	$ 5.35			$ 5.62			$ 20.77	$ 10.42
Class B Units [Member]
Basic and diluted earnings per unit:
Income attributable to USPB available to unitholders (numerator)	$ 35,412			$ 37,215			$ 137,454	$ 68,972
Weighted average outstanding units (denominator)	755,385			755,385			755,385	755,385
Per unit amount	$ 46.88			$ 49.27			$ 181.97	$ 91.31

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6. Investment in National Beef Packing Company (Details - Investment rollforward) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Equity Method Investments and Joint Ventures [Abstract]
Beginning Investment Balance			$ 131,786
Equity in net income	$ 43,014	$ 41,866	158,498	$ 78,823
Distributions from National Beef Packing Company, LLC			(126,285)	$ (46,296)
Ending Investment Balance	$ 163,999		$ 163,999

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6. Investment in National Beef Packing Company (Details - Summary of operations) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Investment in National Beef Packing
Net sales	$ 0	$ 0	$ 0	$ 0
Costs and expenses:
Cost of sales	0	0	0	0
Selling, general, and administrative expenses	4,011	818	6,358	3,509
Depreciation and amortization	4	4	13	13
Total costs and expenses	4,015	822	6,371	3,522
Other income (expense):
Interest income	5	258	163	905
Interest expense	0	0	(2)	(15)
National Beef Packing Company, LLC [Member]
Investment in National Beef Packing
Net sales	2,236,299	2,249,133	7,099,345	6,189,854
Costs and expenses:
Cost of sales	1,901,384	1,915,866	5,897,265	5,507,504
Selling, general, and administrative expenses	20,728	20,545	59,961	59,941
Depreciation and amortization	27,142	31,432	80,465	89,049
Total costs and expenses	1,949,254	1,967,843	6,037,691	5,656,494
Operating income	287,045	281,290	1,061,654	533,360
Other income (expense):
Interest income	201	109	337	347
Interest expense	(1,012)	(2,985)	(7,582)	(9,127)
Income before taxes	286,234	278,414	1,054,409	524,580
Income tax expense	(868)	(657)	(2,872)	(1,637)
Net income	285,366	277,757	1,051,537	522,943
NBP's net income attributable to USPB	$ 43,014	$ 41,866	$ 158,498	$ 78,823

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6. Investment in National Beef Packing Company, LLC (Details Narrative)	Sep. 26, 2020
National Beef Packing Company, LLC [Member]
Ownership percentage	15.0729%

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7. Income Taxes (Details Narrative) $ in Thousands	Sep. 26, 2020 USD ($)
Income Tax Disclosure [Abstract]
State income tax payable	$ 286

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8. Long-Term Debt and Loan Agreements (Details Narrative) - CoBank [Member] - Revolving Credit Facility [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 26, 2020	Jul. 13, 2020
Credit line maximum borrowing capacity		$ 1,000
Credit line, remaining borrowing capacity		$ 1,000
Credit line expiration date	Jun. 30, 2025

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9. Members' Capital (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 26, 2020	Jun. 27, 2020	Mar. 28, 2020	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Sep. 26, 2020	Sep. 28, 2019
Beginning balance	$ 266,138	$ 215,013	$ 202,837	$ 211,696	$ 193,548	$ 219,756	$ 202,837	$ 219,756
Allocation of net income	39,347	101,204	12,176	24,748	24,748	10,538
Ending balance	242,251	266,138	$ 215,013	211,696	211,696	193,548	242,251	211,696
Class A Units [Member]
Allocation of net income	3,935			4,135			15,273	7,664
Member distributions	(6,323)	(5,008)		(660)	(660)	(3,675)
Class B Units [Member]
Allocation of net income	35,412			37,215			$ 137,454	$ 68,972
Member distributions	$ (56,911)	$ (45,071)		$ (5,940)	$ (5,940)	$ (33,071)