Tyson Foods is planning to partner with rancher group Allied Beef to “strengthen” its domestic US supply chain amid persistent cattle shortages.
The tie-up is intended to establish a “more economically sustainable model” throughout the cattle supply chain, the US meatpacker said yesterday (9 November).
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The move supports Tyson’s plans to fully restore the second production shift at its beef plant in Amarillo in Texas.
Tyson has already restarted activities on the second shift and expects it to return to full operation by “summer 2027”.
“Together, we plan to strengthen our beef production, creating value for American ranchers, and helping ensure a reliable supply of high-quality beef for customers and consumers,” Tyson COO Wes Morris said.
Tyson cut its forecasts for sales and profits in September, citing “additional pressure” on its beef business in its fiscal fourth quarter.
It now expects revenue growth of 1.5% to 2%, compared with the 2.5% to 3.5% range issued alongside its third-quarter results on 3 August.
The Hillshire Farm brand owner also lowered adjusted operating income forecast to $1.85bn to $2.05bn, from $2.1bn to $2.3bn.
It pointed to “significant margin compression amid volatile cattle prices and one of the most severe cattle shortages in US history, as well as the expected impact of lower cattle prices on the value of live cattle inventories”.
The New York-listed company’s sharpest forecast revision concerned beef, where it now anticipates an adjusted operating loss between $625m and $775m, against its August estimate of $500m to $650m.
The company is set to report its annual results next week.
In August, Tyson also announced plans to consolidate its US beef network, by closing plants in Illinois and Utah, as well as selling a facility in Washington state.
The beef business will now be anchored around three sites: one in Dakota City, Nebraska; a second in Holcomb, Kansas; and the third being Amarillo.
