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We have covered a lot of ground over the last 30 days and I hope this review has been helpful. While we have set the bar pretty high, with your continued commitment, we look forward to ongoing successes over the next 15 years and beyond.w

Non Breed Specific

NatureSource^® Introduced

National Beef has introduced a NatureSource® Natural Beef product line that is a non-breed specific program. The requirements for producing this NatureSource product are similar for NatureSource® Natural Angus Beef with the following exceptions: Cattle can be any hide color. Brahman influence is allowed. Cattle cannot have horns past the ears and cannot exhibit any dairy characteristics.

As with NatureSource Natural Angus Beef, cattle must be enrolled in the program well in advance of delivery and fed at a feedyard approved by National Beef or IMI Global for natural beef production. Currently, there are three members of USPB’s Qualified Custom Feedyard list approved to finish natural cattle: Fairleigh Feedyard and High Choice Feeders, LLC II, both at Scott City, KS, and Tiffany Cattle Co. at Herington, KS.

For more information on the natural beef product lines, please select the “USPB Natural Beef Programs” link at www.uspremiumbeef.com. There is also a NatureSource grid example on USPB’s home page under the “USPB Grids” link.w

USDA’s C/S Spread Narrows

After running substantially higher than previous years during the end of calendar 2011, the Choice/Select spread appears to have started its usual seasonal decrease during recent weeks.w

We attempted it again in 2009 when we pursued an initial public offering. As any good business with our level of success would expect, from time to time we are also approached by parties who have an interest in purchasing or investing in our company. In March, one such company, LUK, approached us.

As a non-strategic passive investor, LUK offered a unique partnership consideration. Their interest in investing in our company, National Beef, wasn’t to change it or to create merge synergies, but in what we are. Their interest was based on our successful unique partnership between producers and processors, our management, our modern facilities and sound business strategies. This passive interest was different, but enticing.

After a long eight months of exploring interests and negotiating, we agreed to terms that would best ensure a continued successful partnership by entering into a deal to sell a material stake in National Beef, while retaining our cattle delivery system and continuing to have a sizable investment in National Beef. The deal addressed the upcoming liquidity desires of our unitholders while sustaining the original components of our success: Assurance of market access, value-based pricing and ownership in processing.

As to the final question, how does this change USPB’s commitment to the business and the industry? Unitholders who attended our field meetings likely know the answer. But, for those who could not attend and for other stakeholders in the industry, this is a very appropriate question. For members, you agreed to a 79% divestiture of our ownership interest in National Beef at a fair price, addressing future liquidity challenges of the unitholders and the company, and retaining what is most important to you in our successful unique cattle delivery system.

For industry stakeholders with whom we work shoulder-to-shoulder in pursuit of common interests, whether they are customers, suppliers, trade associations or legislators: USPB’s interests and commitment to the success and fulfillment of our industry goals are as strong as ever. Our cattle delivery system remains unchanged and we will retain a material investment of over $160 million (based on transaction price) in processing. We have a lot at stake.

I have found that being able to confidently respond to questions by our industry friends and neighbors without hesitation increases the likelihood of successfully communicating our objectives.