Tyson Foods, a major U.S. supplier of beef, chicken and pork products, is closing a Nebraska plant and scaling back operations at a Texas plant as the industry faces a shortage of cattle.
The company behind brands like Jimmy Dean, Sara Lee and Hillshire Farms said it plans to cease operating the plant in Lexington, Nebraska, a city about 220 miles west of Omaha, by the end of next month, as well as reduce operations at its Amarillo plant in West Texas to a single shift.
The company plans to slash more than 3,200 jobs by Jan. 20 as part of the Nebraska plant closing. Another 1,761 jobs are expected to be cut by that date in Texas, moves "designed to right size its beef business and position it for long-term success," executives at Tyson Foods said in a statement. "To meet customer demand, production will be increased at other beef facilities, optimizing volumes across our network."
Tyson's decision to trim its beef network — a business that accounts for about 40% of the company's $54 billion of fiscal year 2025 sales — comes as U.S. cattle herds are at a 75-year low, the USDA said. The lack of cattle has pushed beef prices to surpass $6 per pound as of September, according to a Federal Reserve Bank of St. Louis report.
Tyson Foods President and CEO Donnie King said in an earnings call last month that increased cattle costs have outpaced higher sales with the company seeking to reduce costs by "prioritizing efficiency" and "introducing innovative products."
In the earnings call, King added, "this positions us to emerge stronger in beef when market conditions improve."
Losses from beef business
Tyson Foods could lose upward of $600 million in its beef business in fiscal year 2026 atop the $720 million loss it has already occurred in the past two years due to the lack of cattle supply. The company said it plans the changes in its operations to help address the current market dynamics.
A flesh-eating pest, called the New World screwworm, has shut down the U.S.-Mexico border for cattle, bison and horses to keep it at bay, posing a challenge in importing cattle, according to an October report from the Farm Bureau. Historically, the United States has imported more than 1 million head of cattle from Mexico, the group said.
Tyson's Nebraska plant has the capacity to process 5,000 head of cattle a day. In all, the company said it has a capacity to process 155,000 head of cattle a week at its 11 facilities that process beef.
The more than half-a-million-square-foot facility in Nebraska is owned by Tyson Foods, according to CoStar data. The company did not immediately respond to an emailed request from CoStar News seeking details on its plans for the property.
Tyson Foods invested $47 million to expand the Nebraska facility a decade ago, the company announced in 2015, with the property being "an important part of our beef business." The Lexington beef complex has been operational since 1990, officials said.
In Texas, Tyson Foods plans to cease its B-shift operations resulting in the company cutting 1,761 jobs by Jan. 20, 2026, the company said, in a Worker Adjustment and Retraining Notification letter sent to the Texas Workforce Commission. The company said it has "difficulties in forecasting whether and when operations might restart," at the company-owned facility totaling more than 700,000 square feet of space.
Tyson Foods invested $200 million in its Amarillo beef plant only a few years ago, adding a 143,000-square-foot addition to the existing plant to house employee "well-being areas" with locker rooms, a cafeteria and locker rooms. At the time, the company said it employed 4,000 workers at the Amarillo plant.
The Amarillo plant is one of the largest of the company's six beef-only processing facilities, officials said in announcing the expansion in August 2022. Other Tyson Foods' beef plants outside of Texas and Nebraska are located in Kansas, Illinois and Washington state.
In 2022, Tyson Foods said it received cattle from nearly 90 independent cattle suppliers in Texas with it having a nearly $3 billion economic impact in the state.