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Tyson cuts profit outlook as beef business struggles
Resumption of cattle imports isn't expected to help packers in near future
Tyson’s chicken business continues to be a key growth driver. (Tiffany Hagler-Geard/Bloomberg)
Key Takeaways:
- Tyson Foods cut its fiscal 2026 adjusted operating income outlook to $2.1 billion-$2.3 billion as beef-business losses remained worse than expected.
- The downgrade reflects a prolonged cattle shortage that kept livestock prices high and pushed expected annual beef-segment losses to $500 million-$650 million.
- Industry recovery may take time as Mexican cattle imports resume and herd rebuilding begins, with analysts and distributors expecting gradual supply improvements.
Tyson Foods Inc. cut its annual profit outlook, signaling that any relief for the U.S. beef industry from a historic cattle shortage is still a long way off.
The country’s largest meatpacker now sees annual adjusted operating income of $2.1 billion to $2.3 billion for fiscal year 2026, lowering its range by $100 million.
The weaker outlook suggests Tyson’s efforts to reduce production capacity have yet to have a significant impact on results for its struggling beef business. Tyson has ceased operations at a Nebraska beef plant and cut output at a Texas facility, moves that that were expected to cool competition for cattle and improve beefpacking margins.
The lower guidance also comes despite recent glimmers of hope for the beef industry — including a planned resumption of cattle imports from Mexico and signs that U.S. ranchers are beginning to rebuild their herds. But those developments aren’t likely to benefit packers for some time.
Tyson’s largest beef segment is now expected to post an adjusted operating loss of $500 million to $650 million for the year, deeper than its prior expectations of a $350 million to $500 million loss. The business continued to post an adjusted operating loss in the third quarter, extending a losing streak that began in early 2024.
Meanwhile, Tyson’s chicken business continues to be a key growth driver, offsetting its struggles in beef. Third-quarter adjusted operating income of $488 million in that segment was up nearly 9% from a year earlier.
The prolonged struggles in Tyson’s beef business come as the U.S.’s cattle herd as of July 1 improved only modestly from the lowest levels in over five decades, according to the U.S. Department of Agriculture. That has continued to support higher prices for the animals that meatpackers buy.
Still, the USDA’s report also signaled that ranchers are holding onto more beef animals for rebuilding the herd. The agency also plans to reopen a port in Arizona to Mexican cattle later this month, and evaluate two New Mexico ports.
But while there are likely cattle in Mexico that can be shipped fairly quickly, the impact won’t be substantial until the New Mexico ports reopen as the Douglas, Ariz., crossing is “relatively small,” said Heather Jones, the founder of Heather Jones Research.
The trade from Mexico, which had been largely stalled since late 2024 to prevent the spread of the parasitic New World screwworm, has in the past amounted to about a million animals each year.
Flows should eventually return to the same levels as prior to the border closure, though that may take “probably a year and change,” said Darin Parker, the president of meat distributor PMI Foods. The effect of supplies likely won’t be realized until the late winter or early spring, as many of the animals coming from Mexico are raised in the U.S. for several more months before slaughter, he added.
Tyson ranks No. 9 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 1 among agriculture/food processing carriers.
