Tyson Foods has suggested beef volumes will continue to suffer in the new fiscal year as “tight” cattle supply is likely to put upward pressure on prices.
While the US-headquartered meat giant reported the dollar value of beef sales edged up in the fourth quarter and over the full 12 months of the 2025 financial year, volumes fell 8.4% and 1.9%, respectively.
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Consequently, prices went up 17% and 9% in the reporting periods.
“The beef segment remains our only soft spot,” president and CEO Donnie King said in his results chat with analysts as chicken sales are expected to take up the slack in fiscal 2026 for Tyson Foods’ two biggest revenue earners.
Arkansas-based Tyson Foods has already pointed to an adjusted operating loss for beef in the new year of $400-600m.
“Cattle supplies are at record lows due to drought, potential herd rebuilding, and the impact of new world screwworm in Mexico. These factors created market headwinds during the quarter,” King explained yesterday (10 November).
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By GlobalDataIn the new year, King and newly installed COO Devin Cole said the challenges revolve around the prospect that tight supply will be hampered by heifer retention, or holding female carves back to join the milk or breeding herd rather than releasing them for slaughter.
“Looking forward, we expect cattle supplies to remain tight as we move into 2026. During this period, chicken is likely to benefit most from changing consumer preferences, both at retail and in foodservice,” King said.
“While we are not satisfied with our current beef results, our diversified business model continues to build resilience and drive profitability across the company.”
King added during the Q&A session that “more heifer retention implies less beef in the near term”, which “means supply of market-ready cattle will fall before it increases in future years”.
In the wider context, King said “consumers remain cautious and selective with their spending”, although he noted that despite rising sales from private-label peers Tyson Foods is not impacted.
“Their growth comes at the expense of other brands, not Tyson, as we continue to outpace the category in both volume and performance,” he said.
With beef prices likely to keep rising, chicken will benefit, according to CFO Kurt Calaway.
Chicken volumes rose 3.7% in the final quarter of fiscal 2025 and 2.6% for the year based on respective pricing of 0.1% and minus 0.1%.
“We believe chicken will be the primary beneficiary of higher beef costs in the upcoming year. We also expect our operational execution to continue to perform at a high level,” Calaway said.
