Tyson Foods anticipates that cattle supplies will remain “tight” for the foreseeable future, as the company reported yet another quarterly decline in beef volumes, which have not yet factored in the closure of its Nebraska plant.
In the three months leading to December 27, beef volumes fell by 7.3%, reflecting a slight improvement from an 8.4% drop in the last quarter of fiscal 2025.
Despite expectations from Tyson’s president and CEO Donnie King for a boost from the new US dietary guidelines—specifically advocating for increased protein consumption—chicken and pork are likely to have to compensate for the decrease in beef volumes.
Additionally, Tyson announced the closure of its Lexington, Nebraska, beef facility in November, along with plans to scale back operations at its Amarillo, Texas site.
During a call with analysts, King noted that these changes, implemented in January, aim to “right-size our beef operations” to ensure a smaller, more efficient footprint, while aligning with the long-term outlook for the US cattle herd.
Looking ahead, King stated, “Continuing to absorb losses like we have been seeing for the past two years is simply unacceptable.” He further indicated that cattle supplies are expected to remain tight throughout 2026 and 2027.
“During this period, chicken is likely to continue benefiting the most from changing consumer preferences, both at retail and in foodservice,” he added.
Tyson has revised its guidance for 2026 full-year adjusted segment operating income losses for beef to a range of $250-500 million, down from an earlier forecast of $400-600 million loss. This adjustment reflects a shift in segment reporting, which now excludes corporate expenses and amortization.
In the first quarter, the segment loss for beef was reported at $319 million, compared to a $26 million loss a year earlier. In contrast, pork, chicken, and prepared foods posted positive results; pork volumes increased by 1.6%, chicken rose by 3.7%, and prepared foods saw a modest gain of 0.2%.
King commented on the impact of the new dietary guidelines issued last month, stating, “These updated guidelines and recommendations represent a historic validation of our core mission: providing high-quality essential protein to millions.” He emphasized that the administration’s advocacy for increased animal-protein consumption aligns with Tyson’s long-standing belief that animal protein is vital for a nutritious diet.
As a leader in the food and beverage industry, Tyson Foods produces one-fifth of all chicken, beef, and pork in the United States. This positions the company uniquely within the competitive landscape of the food and drink business.
COO Devin Cole provided insight on the beef outlook, emphasizing that “cattle availability continues to be the issue for the industry,” given that the US beef herd is currently at its smallest size since 1951. He noted, “Cattle are going to remain extremely tight for the foreseeable future. And we are in these early stages,” although there are “early signs of a rebuild” in the herd.
In summary, Tyson Foods is navigating a challenging landscape in the beef sector while adjusting to shifting consumer trends towards chicken and pork. The company’s strategic changes are critical for sustaining its position in the ever-evolving food and drink consumer trends.
