Tyson Foods Shrinks Beef Network Amid Deep Cattle Shortage
Tyson to shutter its Lexington, Nebraska beef plant and scale back Amarillo, Texas operations as U.S. cattle herds hit 75‑year lows.
What We Know
Tyson Foods announced it will close its beef processing plant in Lexington, Nebraska, in January 2026, affecting approximately 3,200 jobs. The decision comes as U.S. cattle inventories have fallen to their lowest level in nearly 75 years. Concurrently, Tyson will reduce operations at its Amarillo, Texas plant to a single full-capacity shift, impacting around 1,700 workers. To offset production gaps, the company plans to increase throughput at other facilities. The restructuring aims to realign operations with current market realities and trim inefficiencies.
The Lexington plant processes about 5,000 cattle daily—about 5% of national slaughter capacity—and has been underutilized. Its closure is projected to have severe economic consequences for the local economy and regional feedlot operators.
Operational Impact
Tyson’s beef business recorded adjusted losses of $426 million in the year ended September 27 and projects losses of $400–$600 million for fiscal 2026. Ranchers have cut herd sizes following prolonged drought and rising feeding costs. Rebuilding takes years, reinforcing the sustained supply constraints. Beef prices have set records, squeezed by tight supply and robust consumer demand.
Competitive Positioning
Tyson is the first of the major U.S. meatpackers to shutter a large beef plant amid the current cattle shortage. The restructuring reflects moves to pare excess capacity across the industry and cut losses while other processors face the same sourcing challenges.
What’s Next
Tyson will support affected workers with help applying for internal openings and relocation assistance. The company did not clarify severance details. In Lexington, Nebraska’s largest employer in the city of roughly 10,000 residents, the disruption will be significant. Industry observers will watch for how quickly Tyson can ramp up alternate facilities and whether cattle supplies and prices stabilize enough to restore profitability. Federal policymaking, including beef import strategies and investigations into the meat-packing sector, will influence recovery.
What to Watch
- Cattle inventory data and pricing trends—indicators of supply restoration or continuing shortages.
- Tyson’s upcoming fiscal results, to measure sting from restructuring.
- Local economic responses in Lexington and Amarillo: retraining, job transition plans, and political engagement.
- Policy actions on competition, imports, or price oversight in the meatpacking industry.
