The Wall Street Journal’s Patrick Thomas reported that “Tyson Foods, America’s largest meat supplier, is planning to close one of its largest beef-processing plants in Nebraska at a time when a cattle shortage in the U.S. squeezes meatpacking companies. The Lexington, Neb., plant employs roughly 3,000 people and can slaughter almost 5,000 cattle a day, according to industry estimates.”
“Tyson is the first of the big four meatpacking companies that process 85% of beef in the U.S. to close a major plant during the current cattle supply crunch,” Thomas reported. “Meatpackers including Tyson have been losing hundreds of millions of dollars processing beef because of the lowest amount of cattle on U.S. pastures since the 1950s.”
“Tyson said earlier this month that its cattle costs for the 2025 fiscal year that ended in September rose by nearly $2 billion, compared with the prior year. The company reported an adjusted loss of $426 million from its beef business for the year,” Thomas reported. “The plant closure also follows weeks of pressure from the Trump administration to the entire meat industry to find a way to lower beef prices. President Trump said earlier this month that the Justice Department was investigating the meatpacking companies for conspiring to drive up prices.”
“The closure of a plant could hurt beef production, tightening supplies and driving up prices for consumers even more, according to industry analysts. For cattlemen and feedlot operators in Nebraska, the concern is that having one less large buyer of their livestock could hurt the prices they are paid,” Thomas reported. “Tyson (also) said Friday that it is moving its Amarillo, Texas, beef plant that can slaughter about 6,000 cattle a day to a single shift, down from two shifts a day.”
Tyson expects more beef losses this year
Reuters’ Tom Polansek reported that “beef prices soared this year as cattle supplies dwindled and meatpackers increasingly competed for limited supplies of livestock. Ranchers slashed their herds after a years-long drought burned up pasture lands and hiked feeding costs. Some have slowly started to rebuild their herds, though it takes at least two years to raise full-grown cattle.”
“Tyson’s beef business suffered adjusted losses of $426 million in the 12 months ended on September 27 and $291 million over the previous year. The meatpacker projected the unit will lose $400 million to $600 million in the 2026 fiscal year,” Polansek reported. “‘We all expected a plant to be closed at some point in 2026,’ said Rich Nelson, chief strategist for Allendale. ‘I’m a little surprised they’re doing it preemptively.’”
“Losses in Tyson’s beef business were a turnaround from the fat profits it and other processors reaped during the COVID-19 pandemic, when meat prices soared as infections among plant workers slowed output,” Polansek reported.
Nebraska cattle groups, lawmakers react negatively
The Nebraska Examiner’s Cindy Gonzalez reported that “the closure sparked swift reaction from Nebraskans. The Nebraska Cattlemen Board of Directors expressed disappointment – especially, it said, in light of Friday’s U.S. Department of Agriculture data that Nebraska cattle-on-feed inventories remain slightly above year-ago levels in spite of the ongoing cyclical tightness in national cattle numbers.”
“Nebraska Gov. Jim Pillen called the state’s cattle industry resilient and ‘the envy of the world.’ He said Tyson leadership promised to ‘work on future value-added opportunities’ in the state,” Gonzalez reported. “‘Big picture – our excellent cattlemen and cattle feeders have emerging opportunities and will still have the Tyson market to sell into as its planned re-organization will boost capacity and jobs at other Nebraska plants,’ Pillen said.”
“But U.S. Sen. Deb Fischer, R-Neb., a member of the Senate Agriculture Committee, blasted the decision,” Gonzalez reported. “‘As the single largest employer in Lexington, Tyson’s announcement will have a devastating impact on a truly wonderful community, the region and our state,’ she said. Calling Nebraska a beef state that knows better than anyone the highs and lows of the cattle market, Fischer added: ‘It’s no secret that just a few years ago, packers like Tyson were making windfall profits while the rest of the industry was continuously in the red.’”
“‘I call on Tyson to do everything in its power to take care of the families affected by this short-sighted decision,’ she said,” according to Gonzalez’s reporting.
This article originally appeared on Farmers Advance: Tyson is closing a major beef processing plant
Reporting by Ryan Hanrahan, Farmers’ Advance / Farmers Advance
USA TODAY Network via Reuters Connect
