Tyson Foods anticipates a continued decline in beef volumes for the upcoming fiscal year due to the “tight” cattle supply, which is expected to exert upward pressure on prices.
Although Tyson Foods reported a modest increase in the dollar value of its beef sales during the fourth quarter and throughout the fiscal year 2025, volumes decreased by 8.4% and 1.9%, respectively.
Consequently, Tyson’s prices increased by 17% and 9% in these periods.
“The beef segment remains our only soft spot,” stated president and CEO Donnie King during his results discussion with analysts. He mentioned that chicken sales are expected to compensate for beef shortfalls in fiscal 2026, which includes Tyson Foods’ two most significant revenue streams.
Tyson Foods, headquartered in Arkansas, has already projected an adjusted operating loss for beef in the coming year, estimating losses between $400-600 million.
King elaborated, “Cattle supplies are at record lows due to drought, potential herd rebuilding, and the impact of new world screwworm in Mexico, which have all created market headwinds during the quarter.”
In the upcoming year, King and newly appointed COO Devin Cole highlighted challenges related to heifer retention. This retention implies holding female calves back from the slaughter pipeline to join the milk or breeding herd.
“Looking forward, we expect cattle supplies to remain tight as we move into 2026. During this time, chicken is likely to be the primary beneficiary of shifting consumer preferences in both retail and foodservice,” King asserted.
While acknowledging dissatisfaction with current beef results, King maintained that the company’s diversified business model continues to foster resilience and profitability.
He remarked during the Q&A session that “more heifer retention implies less beef in the near term,” meaning that the supply of market-ready cattle is set to decline before a potential future increase.
In a broader context, King observed that “consumers remain cautious and selective with their spending.” Yet, he noted that despite rising sales from private-label competitors, Tyson Foods remains unaffected.
“Their growth comes at the expense of other brands, not Tyson, as we continue to outpace the category in both volume and performance,” he clarified.
With beef prices likely to keep trending upwards, chicken sales will benefit, according to CFO Kurt Calaway.
In the final quarter of fiscal 2025, chicken volumes increased by 3.7%, while for the year, they rose by 2.6%, with pricing fluctuations of 0.1% and -0.1%, respectively.
“We believe chicken will be the primary beneficiary of higher beef costs in the upcoming year. Furthermore, we expect our operational execution to maintain high performance,” added Calaway.
