Tyson Foods cuts profit forecast as tight US cattle supplies squeeze beef business

U.S. ranchers reduced the nation's cattle herd to its lowest level in 75 years after a prolonged drought burned up pastures and raised feed costs, driving up beef prices and squeezing meatpackers' profit margins. Higher beef prices have also weighed on demand as inflation-conscious consumers curb spending.

Tyson now expects fiscal 2026 adjusted operating income of $2.1 billion to $2.3 billion, compared with its previous forecast of $2.2 billion to $2.4 billion.

For its beef business, the company forecast an adjusted operating loss of $500 million to $650 million, compared with its prior expectation of a loss of $350 million to $500 million.

Beef sales volumes fell 15.9% in the quarter that ended on June 27 while prices jumped 12.1%.

U.S. cattle supplies were further constrained after Washington suspended imports of livestock from Mexico more than a year ago in an attempt to keep out the flesh-eating pest New World screwworm. The agency plans to start lifting its ban this month, though the move will take time to benefit beef processors, analysts said.