This week’s Irish Farmers Journal reported that Tyson Foods, one of the largest meat processors in the world, lost $1.135bn (€980m) in beef over the past year.
As Figure 1 (below) shows, this is three times worse than the $381m (€328m) lost in the 2024 financial year and it is forecasting a loss between $400m and $600m (€345m - €519m) for the coming year.
At first glance this looks like a disaster and a business that isn’t viable.
However, thanks to a strong performance by its poultry meat processing division, overall performance for the year was positive and ahead of analyst estimates.
While the beef processing industry in the US is currently going through a tough spell, it wasn’t always that way.
Staying with Tyson, if we look back to its 2021 financial year, we can see that beef processing contributed a $3.240bn (€2.79bn) profit and the following year it was 2.5bn (€2.16bn).
One of the explanations for the change in fortune is that the US cattle herd has fallen to a 75-year low.
This means excess processing capacity and a higher cost of production for beef factories.
US trade policy is also an issue and the spat with China has meant that export licences for that country haven’t been renewed for US beef processors.
Industry investigation
Members of the US beef processing industry have expressed their shock that President Trump has asked the Department of Justice to carry out an investigation on the industry. He accused the industry of “driving up the price of beef through illicit collusion, price fixing, and price manipulation”.
The Meat Institute, which represents over 350 companies and 800 USDA approved plants producing more than 95% of meat and poultry output, have pushed back on the high consumer price of beef.
In response to Trump’s comments on social media, the president and CEO of the Meat Institute, Julie Anna Potts said “despite high consumer prices for beef, beef packers have been losing money because the price of cattle is at record highs”.
She explained that “for more than a year, beef packers have been operating at a loss due to a tight cattle supply and strong demand”.
Her final point referenced what she described as “the government’s own data from USDA" which confirmed "that the beef packing sector is experiencing catastrophic losses and experts predict this will continue into 2026”.
This Meat Institute also refers to the Sterling Beef Profit Tracker which, on a weekly basis, uses the published data to work out producer, feedlot and packer (factory) margins. Its outlook for this year is for factories to lose $165.96 (€143.06) per head.
Not the first time
President Trump isn’t unique in turning his attention to the affairs of US beef processing. Back in January 2022, his predecessor President Joe Biden called a summit where a “centralised portal” was announced to which farmers and others in the supply chain were invited to make complaints about anti-competitive practices.
It also announced the creation of a $1bn fund to encourage expansion in the independent processing sector to create competition for the four main players that dominate beef processing.
Comment: supply is the driver of factory profits
The big difference between then and now was that factories were making huge profits and there was abundant cattle supply.
The big four processing groups - Tyson, JBS, Cargill and National Beef - continue to dominate US beef processing despite the Biden intervention and while they are being squeezed at present, the reality is that they made huge profits in beef processing at the start of the decade.
Future US processing profitability will be determined by the combination of cattle supply, consumer demand and access to export markets.
This week’s Irish Farmers Journal reported that Tyson Foods, one of the largest meat processors in the world, lost $1.135bn (€980m) in beef over the past year.
As Figure 1 (below) shows, this is three times worse than the $381m (€328m) lost in the 2024 financial year and it is forecasting a loss between $400m and $600m (€345m - €519m) for the coming year.
At first glance this looks like a disaster and a business that isn’t viable.
However, thanks to a strong performance by its poultry meat processing division, overall performance for the year was positive and ahead of analyst estimates.
While the beef processing industry in the US is currently going through a tough spell, it wasn’t always that way.
Staying with Tyson, if we look back to its 2021 financial year, we can see that beef processing contributed a $3.240bn (€2.79bn) profit and the following year it was 2.5bn (€2.16bn).
One of the explanations for the change in fortune is that the US cattle herd has fallen to a 75-year low.
This means excess processing capacity and a higher cost of production for beef factories.
US trade policy is also an issue and the spat with China has meant that export licences for that country haven’t been renewed for US beef processors.
Industry investigation
Members of the US beef processing industry have expressed their shock that President Trump has asked the Department of Justice to carry out an investigation on the industry. He accused the industry of “driving up the price of beef through illicit collusion, price fixing, and price manipulation”.
The Meat Institute, which represents over 350 companies and 800 USDA approved plants producing more than 95% of meat and poultry output, have pushed back on the high consumer price of beef.
In response to Trump’s comments on social media, the president and CEO of the Meat Institute, Julie Anna Potts said “despite high consumer prices for beef, beef packers have been losing money because the price of cattle is at record highs”.
She explained that “for more than a year, beef packers have been operating at a loss due to a tight cattle supply and strong demand”.
Her final point referenced what she described as “the government’s own data from USDA" which confirmed "that the beef packing sector is experiencing catastrophic losses and experts predict this will continue into 2026”.
This Meat Institute also refers to the Sterling Beef Profit Tracker which, on a weekly basis, uses the published data to work out producer, feedlot and packer (factory) margins. Its outlook for this year is for factories to lose $165.96 (€143.06) per head.
Not the first time
President Trump isn’t unique in turning his attention to the affairs of US beef processing. Back in January 2022, his predecessor President Joe Biden called a summit where a “centralised portal” was announced to which farmers and others in the supply chain were invited to make complaints about anti-competitive practices.
It also announced the creation of a $1bn fund to encourage expansion in the independent processing sector to create competition for the four main players that dominate beef processing.
Comment: supply is the driver of factory profits
The big difference between then and now was that factories were making huge profits and there was abundant cattle supply.
The big four processing groups - Tyson, JBS, Cargill and National Beef - continue to dominate US beef processing despite the Biden intervention and while they are being squeezed at present, the reality is that they made huge profits in beef processing at the start of the decade.
Future US processing profitability will be determined by the combination of cattle supply, consumer demand and access to export markets.
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