Tyson to boost beef processing after a year of cuts

(George Frey/Bloomberg)

Tyson Foods Inc. is increasing its beef processing capacity, following a year of steep cutbacks as it grappled with a historic domestic cattle shortage.

The U.S.’s largest meatpacker said Nov. 9 it will be adding a second shift to its Amarillo, Texas, beef plant, which had been reduced to operating at a single shift since the start of the year. The addition should be fully operational by summer 2027, contributing to U.S. beef supplies and potentially lowering consumer prices.

READ MORE: Incoming JBS CEO seeks improved beef margins

The move is made possible by a new long-term partnership with Allied Beef Co., a group of American ranchers, Tyson said in a statement. The direct sourcing relationship will create “a more economically sustainable model across the supply chain,” it said.

Allied Beef “works across all stages of cattle production, including both multigenerational ranch and feedlot operations,” a company spokesperson said.

Meatpackers like Tyson typically source from feedlots, which buy animals from other ranchers at auctions. Cattle prices have surged as the U.S. herd shrank to its smallest in over a century due to droughts and high operating costs. That 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 for the Trump administration, as prices for the protein remain an outsize driver of food inflation. It has encouraged more foreign ground beef imports and resumed live cattle shipments from Mexico, both moves that have helped meatpackers. At the same time, the administration has sought to bolster smaller producers through investments, while attacking larger meatpackers because of consolidation in the meat industry.

Tyson has sought to rightsize the beef business by aggressively cutting capacity, a strategy also taken by peers like JBS NV and Cargill Inc. Tyson began cutting its Amarillo beef plant to a single shift in January, while also closing its Lexington, Neb., facility.

Further cuts came as Tyson’s beef business continued to report steep losses. The meatpacker in August said it would close more facilities and center its beef operation around just three plants including the one in Amarillo. Even with those measures, the company less than a month later issued a surprise cut to its profit outlook.

Tyson said the second shift at Amarillo “will increase production and create significant additional employment opportunities,” but did not provide specific figures. The reduction at Amarillo in January had led to 1,700 layoffs, and was expected to reduce processing per day by more than 2,500 cattle.

The meatpacker is scheduled to report its fourth-quarter earnings on Nov. 16.

Tyson ranks No. 8 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 1 among agriculture/food processing carriers.