US Beef Industry: Is the Food Supply Chain at Risk?
Tyson, the biggest meat supplier in the US, is shutting one of its main beef processing plants by January 2026. This comes as a result of pressure from Washington and struggles with supply.
The closure will mean thousands of job losses and an inability to meet consumer demand.
Supply chain disruption
Tyson is America's largest meat company, with a focus on bringing high quality food to every table in a safe, sustainable and affordable manner. Now, it has announced its plan to close one of its largest beef processing plants.
This announcement comes as the industry is facing difficulty with low cattle supplies and as political pressure from Washington increases.
The Lexington, Nebraska will be shut by January 20th 2026, laying off more than 3,200 people in the process. The closure of this facility is supposedly meant to allow for the increase of production elsewhere, but this closure will have a significant impact on the community in Lexington. Moreover, it is reducing its Amarillo, Texas beef plant down from two shifts a day into a single shift.
The closure and restructure comes as a result of this major loss, with the aim of working on a smaller scale to meet demand.
“We firmly believe there isn’t a better place to efficiently and economically raise cattle and produce beef than Nebraska,” the Nebraska Cattlemen Board of Directors said in a statement to the Nebraska Examiner.
“This will have a profound impact on the community of Lexington and many cattle producers.”
The low cattle numbers have been caused by a combination of factors:
- severe drought conditions burned grazing land, meaning ranchers had to downsize
- pests, such as the New World screwworm
- rising costs of land also contributed to the need to downsize
- low profit margins on raising cattle after the pandemic caused major income issues
Ranchers had to downsize their herds by bringing more animals to slaughter a few years back, with the inability to recover as demand grew.
Financial losses
Meatpackers have been actively losing money in their business, despite the high prices on the shopfloor. Tyson has reported that its cattle costs for the 2025 fiscal year rose by nearly US$2bn compared to 2024. Moreover, it has reported an adjusted loss of US$426m on its beef business for 2025.
Senator Deb Fischer of Nebraska, a rancher and member of the Senate Agriculture Committee, said “Nebraska is the beef state, and we know better than anyone the highs and lows of the cattle market. It’s no secret that just a few years ago packers like Tyson were making windfall profits while the rest of the industry was continuously in the red.”
Tyson said this decision was meant to "right-size its beef business and position it for long-term success” as the industry struggles to meet consumer demand. Pastures across the US have seen the lowest number of cattle since the 1950s, but demand is still high.
As a result, livestock prices and beef prices have soared, in an attempt to fill those losses. In August, ground beef prices were at a record high of US$6.32 a pound, with beef prices up 13.9% year-over-year.
Earlier this month, US President Donald Trump accused imported meat packers of inflating US beef prices, causing further disruption throughout the industry. In 2024, the US imported 16% of its beef, but Trump is taking action to prioritse the needs of American ranchers.
Brazil is a major beef exporter, and the biggest supplier of beef trimmings. The high tariffs on Brazil, applied by Trump, has introduced higher prices for consumers for this product.
With consumers facing high prices and meat producers losing money on production, the beef industry is about to see a major disparity between supply and demand. The closure of the Tyson facility - while saving the company money - will also contribute to the supply chain disruption faced by the industry.
