<body><div><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=0f30Iu_1Gx3q4MA00" alt="https://img.particlenews.com/image.php?url=0f30Iu_1Gx3q4MA00" width="1200" height="634" ></figure>It’s been 25 years since Tyson Foods acquired Dakota Dunes, S.D.-based IBP and jumped headfirst into the beef business. The $4.5 billion deal closed in October 2001 after Tyson lost a Delaware Court ruling that denied the meat giant’s efforts to stop the deal after getting cold feet.The deal secured the Springdale-based company’s place as a leader in the national food production, marketing and distribution sector.“The transaction, which will result in a combined company with approximately 28% share of the beef market, 25% share of the chicken market, and 18% share of the pork market, has already achieved regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act,” Tyson Foods noted in a June 2001 press release.A quarter century later, that beef business, which also includes pork slaughter and processing, operates under the Tyson Fresh Meats subsidiary. Tyson’s beef business has brought considerable revenue and wealth to the company over the years. (This report about Tyson’s beef business does not include pork numbers.)Since 2002, Tyson’s beef business has added more than $273.27 billion in revenue. That figure includes revenue booked through the fiscal third quarter of 2026. Tyson will report its fiscal 2026 year-end earnings on Nov. 16. Tyson’s beef business comprises about 33.4% of the company’s total sales revenue since 2002.Beef operating income since 2002 totals $10.676 billion. The highest-earning years were in 2021 and 2022, before the recent downturn began amid shrinking cattle herd numbers. Tyson’s beef segment lost money in four different years between 2002 and 2022. The bulk of the losses have occurred since then, as the segment has bled more than $2.38 billion in red ink since 2023. The company has said it expects to lose $775 million this fiscal year.RECENT RESTRUCTURINGTyson has restructured its beef segment multiple times in the past two decades. The company reduced packing capacity in recent years, closing a plant in Lexington, Neb., in January that eliminated around 3,200 jobs. In August, a plant in Joslin, Ill shuttered operations, resulting in about 2,500 jobs. At that same time, the Amarillo plant scaled back to one shift.Tyson said at that time it was anchoring its beef business around three strategically located beef facilities in the central U.S.: Dakota City, Neb., Holcomb, Kan., and Amarillo, Texas. This move was needed, according to Tyson, to create a more competitive footprint amid the historic cattle shortages. A case-ready plant for beef located in Eagle Mountain, Utah, was also shuttered this summer. Tyson also put its beef plant in Pasco, Wash., up for sale amid the latest restricting efforts.<figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=3CJzcK_1Gx3q4MA00" alt="https://img.particlenews.com/image.php?url=3CJzcK_1Gx3q4MA00" width="539" height="525" ><figcaption>Jeffrey Schomburger</figcaption></figure>King stepped down as CEO on Oct. 4, and was succeeded by Jeff Schomburger, who announced Monday (Nov. 9) a new partnership with a group of American ranchers in hopes of boosting the domestic cattle supply chain and further supporting Tyson’s beef production. Tyson is partnering with Allied Beef Company, which will give the meat giant a direct connection with ranchers and the cattle they raise. Tyson said the deal also will allow it to add a second production shift at its large packing facility in Amarillo, Texas, by late summer 2027.“The future of our beef business depends on strong partnerships across the supply chain,” said Wes Morris, Tyson’s chief operating officer.   Morris said with Allied Beef the plan is to strengthen beef production while also creating value for American ranchers. The release stopped short of saying how ranchers will be compensated. Tyson routinely buys forward the cattle that are slaughtered and processed through commodity contracts and through live auctions. But record low herd numbers continue to drive cattle prices higher and processing margins lower. Beef prices for consumers continue to rise, which pushes beef demand lower as chicken and pork becomes relatively more affordable for shoppers.CATTLE NUMBERSPooran Sharma, equity analyst at Stephens Inc., said the Allied Beef partnership could help Tyson’s beef business.“A direct relationship with ranchers could provide Tyson with greater visibility into cattle availability, improved scheduling, and better plant utilization,” Sharma noted. “The additional slaughter capacity from Amarillo could pressure industry packer margins, but increased cattle availability from Mexico should help offset this pressure.”Sharma said cattle are now coming across the Mexican border with three crossings since August and a fourth crossing scheduled for later this month. He said the timing of increased cattle flows could support the second shift being added at Tyson’s Amarillo plant by the summer.The U.S. Department of Agriculture reports more than 50,000 head of cattle have crossed the border from Mexico into the U.S. through Oct. 23. More than 13,000 feeder cattle crossed during September, though overall volumes remain well below historical pre-closure averages, which averaged about 1.2 million head annually.The latest herd count puts cattle and calves at 94.2 million head, as of July 1. This was up slightly from a year ago and the beginning of a slow stabilization of what has been a seven-year decline. However, the latest Cattle on Feed report showed feedlot placements down 9.2% year over year, suggesting continued pressure on slaughter availability in the coming quarters, noted Sharma.CONTINUED UNCERTAINTYAt the height of Tyson’s beef business between 2018 and 2022, the company benefitted from cheaper cattle amid a big sell-off brought on by prolonged drought and high grain input costs. That also included a pandemic during which processing and packaging plants faced worker shortages.In 2018, Tyson Foods recorded beef operating income of $1.013 billion on sales of $15.473 billion. The following year, the company had beef operating income of $1.107 billion with sales of $15.828 billion. During the pandemic years of 2020 through 2021, Tyson reported beef operating income of $1.686 billion and $3.240 billion, respectively. Sales topped out at $15.742 billion and $17.999 billion, respectively. The last year that Tyson returned a beef profit was in 2022, with operating income of $2.502 billion and sales of $19.854 billion.With Tyson’s smaller plant footprint and fewer cattle available for purchase, slaughter numbers have averaged around 155,000 head annually in recent years. Slaughter numbers were as high as 174,000 per head weekly when Tyson was running at full capacity. Negative beef results have persisted since 2023, totaling more than $2.3 billion in losses, with losses are expected to continue into 2027.“Beef packer fundamentals have shown some improvement in recent months, supported by industry capacity adjustments and lower cattle costs,” Sharma said. “However, we think the sustainability of this improvement remains uncertain given the tight intermediate-to longer-term cattle supply outlook.”Sharma said he expects the fewer beef packing plants in operation today will benefit from the resumption of Mexican cattle imports to provide some relief, although the timing and magnitude of these benefits remain uncertain.“In our view, the key debate is whether these improvements can sufficiently offset the constrained slaughter pipeline, particularly in the second half of 2027,” he said.</div></body>

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It’s been 25 years since Tyson Foods acquired Dakota Dunes, S.D.-based IBP and jumped headfirst into the beef business. The $4.5 billion deal closed in October 2001 after Tyson lost a Delaware Court ruling that denied the meat giant’s efforts to stop the deal after getting cold feet.

Significant losses expected to continue for Tyson beef segment

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It’s been 25 years since Tyson Foods acquired Dakota Dunes, S.D.-based IBP and jumped headfirst into the beef business. The $4.5 billion deal closed in Oct

Significant losses expected to continue for Tyson beef segment

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