1273784--11/16/2009--NATIONAL_BEEF_PACKING_CO

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{cost, operation, labor}

{operation, natural, condition}

{customer, product, revenue}

{product, liability, claim}

{condition, economic, financial}

{cost, regulation, environmental}

{stock, price, operating}

{operation, international, foreign}

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{acquisition, growth, future}

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Risks Related to Our Industry and Our Business Outbreaks of disease affecting livestock can adversely affect demand for our products and the supply of cattle and thereby adversely affect our business. If our products or products made by others using our products become contaminated or are alleged to be contaminated, we may be subject to product liability claims and product recalls that would adversely affect our business. Our margins may be negatively impacted by fluctuating raw material and utility costs, selling prices, changes in our relationships with our suppliers and other factors that are outside of our control. Our international operations expose us to political and economic risks in foreign countries, as well as to risks related to currency fluctuations and could negatively affect our sales to customers in foreign countries and our operations and assets in such countries. Compliance with environmental regulations could result in significant costs and failure to comply with environmental regulations and our use of hazardous substances, including at National Beef Leather s tannery facility, could result in civil as well as criminal penalties, liability for damages and negative publicity. Our indebtedness could adversely affect our business and our liquidity position. Our operating results could be negatively impacted by our hedging and derivative positions. We generally do not have long-term contracts with our customers, and, as a result, the prices at which we sell our beef products are subject to market forces. Wal-Mart s failure to continue purchasing from us could have a material adverse effect on our sales. We are subject to extensive governmental regulation and our noncompliance with or changes in applicable requirements could adversely affect our business, financial condition, results of operations and cash flows. Failure to successfully implement our business strategy may impede our plans to increase revenues, margins and cash flow. Changes in consumer preferences could adversely affect our business. The beef processing industry is highly competitive and our customers might not continue to purchase our products from us or prices we receive for our products could fluctuate or be adversely impaired by actions taken by our competitors. Extreme weather or other forces beyond our control could negatively impact our business. The sales of our beef products are subject to seasonal variations and, as a result, our quarterly operating results may fluctuate. We depend on the service of key individuals, the loss of whom could materially harm our business. Our performance depends on favorable labor relations with our employees. Any deterioration of those relations or increase in labor costs could adversely affect our business. The consolidation of our retail and food service customers may put pressures on our operating margins. We may not be able to successfully complete acquisitions, affecting our ability to grow, or integrate completed and future acquisitions, which could result in failure to achieve our expected acquisition benefits, the disruption of our business and an increase in our costs. Our operations are subject to the general risks of litigation. Deterioration of economic conditions could negatively impact our business. Risks Related to U.S. Premium Beef USPB has a majority interest in our Company and, through their representative on our Board of Managers, has the ability to significantly influence our business and affairs; USPB s interests could conflict with other stakeholders. We purchase a portion of our cattle through U.S. Premium Beef and its producer-owners and, because U.S. Premium Beef has a majority interest in our Company, we may not be able to resolve conflicts with respect to these purchases on the most favorable terms to us.

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1273784--11/16/2009--NATIONAL_BEEF_PACKING_CO_LLC