Tyson Foods expects cattle supplies to remain “tight” for the foreseeable future as it reported another quarterly decline in beef volumes, which do not yet reflect the closure of its Nebraska plant.
Beef volumes dropped 7.3% in the three months to 27 December, Tyson reported yesterday (2 February), a slight improvement from an 8.4% decrease in the final quarter of fiscal 2025.
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Despite Tyson’s president and CEO Donnie King expecting an uplift from the new US dietary guidelines, which put protein front and centre, chicken and pork will likely have to take up the slack from the losses in beef volumes.
Tyson announced the closure of its Lexington, Nebraska, beef facility in November, alongside a plan to scale back operations at its site in Amarillo, Texas.
King said in a call with analysts yesterday the changes were implemented in January as a means to “right-size our beef operations with a smaller and more efficient footprint, higher capacity utilisation, and stronger alignment with the long-term outlook for the US cattle herd”.
He added: “Continuing to absorb losses like we have been seeing for the past two years is simply unacceptable. Looking forward, we expect cattle supplies to remain tight throughout 2026 and 2027.
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By GlobalData“During this period, chicken is likely to continue to benefit most from the changing consumer preferences, both at retail and in foodservice.”
Tyson tweaked its 2026 full-year guidance for adjusted ‘segment’ operating income losses for beef to $250-500m, from an adjusted operating profit loss of $400-600m.
The change to segment reporting reflects the exclusion of corporate expenses and amortisation from the metric and will be the new standard going forward, CFO Curt Calaway said.
The first-quarter segment loss for beef was $319m versus a $26m loss a year earlier, while pork, chicken and prepared foods booked positive results.
Pork volumes were up 1.6%, while chicken registered a 3.7% increase and prepared foods added 0.2%.
Commenting on the update on the new dietary guidelines issued last month, King said: “These updated guidelines and recommendations represent a historic validation of our core mission: providing high-quality essential protein to millions.
“By advocating for increased animal-protein consumption as a leading pillar of a healthy lifestyle, the administration has underscored what we have always known: animal protein is a foundational building block of a nutritious diet.
“As a producer of one out of every five pounds of chicken, beef, and pork in the United States, Tyson Foods is uniquely positioned as the leader in this real protein space.”
Devin Cole, Tyson’s chief operating officer, offered some balanced perspective on the outlook for beef but said “cattle availability continues to be the issue for the industry”.
Cole noted the US beef herd is currently the smallest since 1951.
“Cattle are going to remain extremely tight for the foreseeable future. And we are in these early stages,” the COO added. “I would say that we do continue to see some signs, early signs of a rebuild.”
