Tyson Foods to Close Nebraska Beef Plant Amid Declining Cattle Supplies
Rep. Troy Downing from Montana appeared on “Morning with Maria” to talk about the economic impact of a government shutdown, surging beef prices, and the president’s $2,000 relief proposal as inflation and national debt concerns rise.
In a recent announcement, Tyson Foods stated it will shut down its significant beef processing facility in Lexington, Nebraska, in January due to dwindling cattle supplies in the U.S. The closure will affect about 3,200 employees, and the company plans to reduce operations at its Amarillo, Texas, plant by switching to a single shift, impacting roughly 1,700 workers.
The anticipated changes are set to take place around January 20. Despite these cuts, Tyson Foods aims to increase output at other locations to satisfy customer demand. The company expressed its commitment to support affected employees during this transition, offering assistance in finding new positions and relocation benefits.
Beef Prices Reach Record Highs Amid Supply Crisis
Currently, beef inventories across the nation have plummeted to their lowest levels in the last 70 years, and this has led to soaring consumer prices. The Lexington facility, capable of processing about 5,000 cattle each day—a figure that represents roughly 5% of the total U.S. slaughter—has been operating below its capacity, according to Matt Wiegand, a commodity broker in Nebraska.
This year, as cattle numbers have declined, beef prices have spiked significantly. The U.S. Bureau of Labor Statistics’ Consumer Price Index for September showed that prices for beef and veal have risen by 14.7% compared to a year ago. Ground beef increased by 12.9%, beef roasts by 18.4%, and beef steaks by 16.6%—all well above the general inflation rate of 3.1% noted at that time.
Concerns Over Meat Processing Industry
Ranchers have been reducing their herds primarily due to drought conditions impacting key grazing areas. While some have slowly started rebuilding their cattle numbers, raising a full-grown cow typically takes a minimum of two years. Tyson’s beef division reported an adjusted loss of $426 million for the fiscal year ending September 27, which follows a loss of $291 million last year. In their forecast, losses for the upcoming fiscal year 2026 may range between $400 million to $600 million, despite strong demand from consumers anticipating higher prices.
Americans are projected to spend over $40 billion on fresh beef in 2024, representing more than half of all fresh meat sales, according to Beef Research, a contractor for the National Cattle and Beef Association.
