Tyson Foods Inc. is increasing beef processing capacity following a year of steep cutbacks due to a historic domestic cattle shortage. The US's largest meatpacker announced it will add a second shift to its Amarillo, Texas beef plant, which had been reduced to a single shift since the start of the year. The addition should be fully operational by summer 2027, contributing to US beef supplies and potentially lowering consumer prices. This move is made possible by a new long-term partnership with Allied Beef Company, a group of American ranchers, which Tyson says will create "a more economically sustainable model across the supply chain."
Cattle prices have surged as the US herd shrank to its smallest in over a century due to droughts and high operating costs. Yet market volatility has dissuaded ranchers from the yearslong investment of retaining animals to rebuild herds. The shortage has tightened margins for processors, with Tyson's beef segment operating at a loss every quarter since early 2024. Beef supplies have become a key concern, encouraging foreign ground beef imports and resumed live cattle shipments from Mexico. Tyson has sought to rightsize the beef business by aggressively cutting capacity, closing facilities including its Lexington, Nebraska plant. Even with those measures, the company issued a surprise profit outlook cut less than a month later. The second shift at Amarillo "will increase production and create significant additional employment opportunities," though Tyson did not provide specific figures. The reduction in January had led to 1,700 layoffs and was expected to reduce daily processing by more than 2,500 cattle. Tyson is scheduled to report its fourth-quarter earnings on Nov. 16.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing