Tyson Foods Inc. is closing more beef plants as a prolonged cattle shortage continues to force the US beefpacking industry’s restructuring.
The country’s largest meatpacker said it would cease operations at an Illinois beef plant and a Utah case-ready facility, while also pursuing the sale of another beef plant in Washington. The moves are the latest in a wave of closures, as beef processors try to trim capacity in line with the size of the smaller US cattle herd.
Production at the affected facilities will be absorbed by other plants, and Tyson now plans to anchor its beef operation around just three plants: in Nebraska, Kansas and Texas. The plant in Amarillo, Texas, that had previously been cut to a single shift, will return to two shifts “as cattle become available,” the company said.
The changes aim “to create a more competitive footprint amidst one of the most historic cattle shortages the country has ever experienced,” the company said in a statement Thursday.
The Illinois and Washington beef plants process about 5,000 heads of cattle per day, according to a note from Barclays analysts led by Benjamin Theurer. Tyson’s daily slaughter capacity is estimated to have dropped by about 10,000 heads since the start of 2025, to between 18,000 to 20,000 animals a day, assuming full double shifts at Amarillo, the analysts estimate.
The move could reduce the company’s market share, especially as the Washington facility may be sold to a competitor, but “better utilization rates on higher-end facilities is likely to improve the overall margin profile of the segment,” the analysts said.
To tackle such challenges, companies have ceased operations in different facilities in an effort to cool competition for cattle and improve margins. Tyson earlier this year closed a different Nebraska beef plant. Peer JBS NV more recently said it would convert its closed beef plant in Pennsylvania to make value-added products, and Cargill Inc. previously closed a Milwaukee facility.
The moves over the past two years already “brought the supply and demand into a better balance,” National Beef Chief Executive Officer Tim Klein said on a Friday earnings call. He added that he believes “the most challenging part of the phase of the cycle is now behind us.”
Meatpacking shares rose Friday. Tyson in New York and MBRF in Brazil both posted their biggest intraday jumps in about two weeks. JBS shares also edged higher.
To be sure, a full recovery for the industry remains out of reach. Tyson last week cut its annual profit outlook, and forecast deeper adjusted operating losses in its beef segment. National Beef, the North American beef segment of Brazil’s MBRF Global Foods SA, saw a 4.8% decline in gross profit in the second quarter.
JBS’s incoming chief executive officer, Wesley Batista Filho, said earlier this week that its US beef business had yet to benefit from its restructuring efforts.
Meatpackers should see some relief from the US Agriculture Department plan’s to gradually resume live cattle imports from Mexico. Those shipments had been largely halted for over a year to prevent the spread of the New World screwworm, and are slated to begin in late August with one Arizona port.
Yet with the domestic cattle herd still near the lowest level in about five decades, a full return to normalcy will take more time. A USDA report last month showed ranchers are retaining some animals for breeding, but that move has been modest.
The USDA’s report, “which included continued evidence of limited heifer retention, indicates these supply constraints are likely to persist, requiring strategic action,” Tyson said in its statement.