Tyson Foods today announced network changes designed to right-size its beef business and position it for long-term success. The company will end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift. To meet customer demand, production will be increased at other company beef facilities, optimizing volumes across its network.
The Lexington plant, which operated for 35 years, employs nearly 3,200 people and can slaughter almost 5,000 cattle a day, according to industry estimates. It is one of 11 beef segment facilities in the company and one of the largest. Another 1,700 workers will be impacted in Amarillo.
Tyson Beef Division Faces Losses
In the latest U.S. Security and Exchange Commission report Tyson Foods reported operating loss for the beef division of $1.135 billion for the fiscal year ending September 27, 2025 with adjusted operating losses of $426 million also released by the company. Tyson reported its cattle costs were up $1.575 billion versus a year ago.
For 2026, Tyson projects additional losses in its beef division. In a Nov. 10 news release the company stated that USDA projects domestic beef production will decrease approximately 2% in fiscal 2026 as compared to fiscal 2025. Therefore anticipate adjusted operating loss is estimated between $(600) million to $(400) million in fiscal 2026.
Beef Packing Industry Faces Negative Margins
“As I have commented several times this year, a packer or packers would eventually reduce capacity,” says John Nalivka of Sterling Marketing. “Capacity is critical to the success of any business with the natural economic incentive to increase capacity to gain economies of scale and reduce per unit costs. Sharply reduced cattle numbers became the downside of economies of scale for packers in the face of significant herd liquidation that took the cattle inventory to its lowest numbers since 1951.
Nalivka says the packing industry has been reducing absolute capacity since 2000.
“Fed plants have still been operating at an average of 78% utilization this year compared to the low-to-mid 90% range from 1994-2008,” he adds.
Industry Faces Historically Tight Cattle Supplies
Record fed and feeder cattle prices during 2025 have been a result of a 70 year low in the cattle herd tied to consecutive years of drought in major cattle producing regions of the United States. The supply was recently constricted even further by the closure of the Southern border to Mexican feeder cattle to prevent New World Screwworm (NWS) from entering the U.S. Plus, the 50% increase in tariffs on Brazilian beef in mid-August nearly shut off imports of lean trimmings and grind which are blended into ground beef.
The rebuilding of the U.S. cow herd has also been slower than expected due to a number of factors including the older age of producers, higher interest costs and the desire of cattle producers to pay down debt. That has all attributed to less heifer retention.
Negative Reaction
In a news release from the company, Tyson Foods said it recognizes the impact these decisions have on team members and the communities where we operate. The company said it is committed to supporting its team members through this transition, including helping them apply for open positions at other facilities and providing relocation benefits.
Nebraska Senator Deb Fischer (R), who also serves on the Senate Agriculture Committee, released a statement following the announcement.
With these changes, Tyson Foods says it is ensuring it will continue to deliver high-quality, affordable and nutritious protein for generations to come.
The plant is scheduled to close on Jan. 20.
