Tyson Will Close One Plant and Cut Shifts at Another. What That Means for Beef Prices and One Small Town

By Molly Ashford

The announcement that Tyson would shutter a massive beef processing plant in Nebraska was the first such closure in more than a decade. Beef processors are running at lower capacity, as the U.S. cattle herd size is the smallest it's been since the 1950s.

When Tyson Foods announced it would close a beef processing facility in Lexington, Nebraska, and scale back to one shift at a facility in Amarillo, Texas, the company said the move was necessary to “right size” its beef business.

In total, the closure and cutbacks will eliminate about 7% to 9% of total beef processing capacity nationwide.

But David Anderson, a livestock economist at Texas A&M university, doesn’t anticipate that it will have large impacts on the prices producers get for their cattle or how much consumers pay for beef at the grocery store.

“Typically, when a plant closes, what we expect is lower cattle prices and higher beef prices, because we’ve lost this capacity,” he said. “But at the same time, we’ve got so much excess capacity already that that may not happen. It’s not like the closing has created a constraint on packing.”

The closure and cutbacks come amid significant economic issues for meatpackers. In 2025, the U.S. recorded its smallest beef cattle herd in more than 70 years, and meatpackers are losing money as they operate well below capacity.

According to Sterling Marketing, which releases weekly reports on beef industry trends, beef cattle processors were operating at 81.5% of capacity in the week ending on Dec. 6. The Lexington plant was operating at less than that, with about 75% of its daily capacity, according to a report from Drovers Magazine.

Anderson said cattle is a “cyclical industry.” Very rarely, he said, are the different segments of the industry cow-calf producers, feedlots, meatpackers and retailers making money at the same time.

“When we get to very low numbers of cattle, we have very high prices,” he said. “The cow-calf producers and ranchers do well, that’s their turn to make a profit. And typically, feeders and packers lose money. And then, if we went back just a couple of years, we had very low cattle prices. Meatpackers did extremely well, but cow-calf ranchers were losing money.”

Cattle herds in the U.S. have been shrinking in recent years for a variety of reasons.

Widespread drought conditions in recent years have reduced the availability of grazing land and increased feed costs. The New World Screwworm, a parasite impacting livestock, led to the U.S. closing its southern border in May to live animal imports, including cattle. Some beef processing plants relied on cattle imported from Mexico to fill their facilities.