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Stable Demand Puts US Premium Beef Back on Track

22 April 2009

US - U.S. Premium Beef’s (USPB) financial results saw significant improvement this year recording a net income of $31.4 million compared to a net loss of $7.6 million for the same period in the prior fiscal year.

For the year-to-date period, USPB had a net income of $28.2 million, or $38.33 per set of linked units (one Class A and one Class B unit), compared to a net loss of $21.3 mil­lion, or $28.91 per set of linked units, for the same period in the prior fiscal year, which was an improvement of $49.5 million.

"Our company’s net sales were higher in the year-to-date period than those of the prior year period primarily due to a relatively small increase in the average sales prices per head which was partially offset by fewer cattle being processed in the current year," points out CEO Steve Hunt. "A relatively stable demand for beef products allowed the sales prices to cover the cost of the live cattle that we processed during the first half of the fiscal year.

"Consumer spending and the demand for all proteins, es­pecially beef, continues to dampen our industry’s outlook," Hunt explains. "However, declining cattle and competing meat supplies should be supportive to prices in the next several months.

"The global economic concerns remain, but the value of the U.S. dollar has declined and could begin to be sup­portive to beef exports," he adds. "Beef by-product values remain under severe pressure. Consequently, boxed beef and the related value added programs will need to carry a larger percentage of our total processing returns in the com­ing months."

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