Tyson slashes profit forecast as beef unit bleeds cash amid cattle shortage

Tyson Foods has slashed its fiscal 2026 adjusted operating income outlook to $2.1 billion–$2.3 billion, a $100 million reduction, as losses in its beef business deepen. The company now expects its beef segment to post an adjusted operating loss of $500 million–$650 million for the year, worse than its prior forecast of $350 million–$500 million. The downgrade reflects a prolonged cattle shortage that has kept livestock prices elevated, despite Tyson’s efforts to reduce production capacity by shuttering a Nebraska beef plant and cutting output at a Texas facility. Industry recovery remains distant, with analysts and distributors expecting gradual supply improvements as Mexican cattle imports resume and herd rebuilding begins. The resumption of cattle imports from Mexico, stalled since late 2024 due to the New World screwworm outbreak, is not expected to provide near-term relief. While the U.S. cattle herd showed modest improvement as of July 1, ranchers are retaining more animals for herd rebuilding, limiting immediate supply gains. The USDA plans to reopen a port in Arizona later this month and evaluate two New Mexico ports, but the impact will be limited until the New Mexico crossings are operational. Historically, Mexican cattle imports totaled about a million animals annually, but flows are expected to return to pre-closure levels only after roughly a year. Tyson’s chicken business continues to offset the beef unit’s struggles, with third-quarter adjusted operating income rising nearly 9% year-over-year to $488 million. The prolonged beef industry downturn coincides with the U.S. cattle herd sitting at its lowest levels in over five decades, keeping prices high for meatpackers.