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Beef’s 75-Year Low Meets the Grocery Aisle

2h ago · 8 sources · earnings

Tyson just gave us a clear read on the beef cycle. It is not pretty.

In Q2, beef volumes fell 13.1% after Tyson pushed through an 11.5% price increase to offset a shrinking cattle herd. USDA expects domestic production to drop about 2% in 2026. Tyson is now guiding to a $350 million to $500 million operating loss in beef this year.

The supply crunch is forcing real structural change. Tyson permanently closed its Lexington, Nebraska plant, one of the nation’s largest, processing about 5,000 head a day or roughly 5% of US slaughter capacity. More than 3,000 jobs were cut. The University of Nebraska estimates $241 million in lost local wages and a $530 million annual hit to statewide labor income.

And yet, the broader machine keeps moving. Companywide sales rose 4.4% to $13.7 billion, with pork up 4.4%, chicken up 1.7% and prepared foods up 0.4%.

Here is the big takeaway. Beef is cyclical. Portfolios are strategic. Tyson cannot fix a 75-year low in cattle supply, but it can shift mix, close plants and lean into chicken and pork. In a high price environment, protein loyalty gets tested. The winners will be the ones with options on the shelf.

Key facts

  • Tyson Foods’ second-quarter beef volumes slid 13.1% after the company hiked prices 11.5% to offset pressure from a shrinking herd.
  • USDA predicts domestic beef production will drop about 2% year over year in 2026, resulting in a segment operating loss of $350 million to $500 million in the year for Tyson.
  • Tyson permanently closed its Lexington, Neb., beef plant, which processed about 5,000 head of cattle daily, or about 5% of the total US slaughter capacity.
  • The closure eliminated more than 3,000 jobs and resulted in about $241 million in lost wages and benefits locally and a $530 million annual hit to statewide labor income, according to the University of Nebraska.
  • Despite beef challenges, Tyson’s overall sales increased 4.4% year over year to $13.7 billion, with pork volumes up 4.4%, chicken up 1.7% and prepared foods up 0.4%.
  • 13.1%
  • 11.5%
  • 2%
  • $350 million to $500 million
  • 5,000 head
  • 5%
  • 3,000 jobs
  • $241 million

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