Tyson Foods cuts annual forecast again as cattle pressure worsens

Tyson Foods cut its annual profit forecast for a ​second time within a month on Thursday as tight ‌U.S. ​cattle supplies, volatile prices and cautious consumer spending put further strain on its struggling beef business. The company has eliminated thousands of meatpacking workers this year through plant closures intended to improve results in its beef unit. The ‌business has been bleeding money as high costs for scarce cattle have outpaced benefits from record-high beef prices.

President Donald Trump signed a proclamation last week aimed at increasing U.S. imports of ground beef in a bid to bring down prices for consumers ahead of the midterm elections in November. The average price of lean ‌and extra lean ground beef reached $8.41 per pound in July, up more than 38% from five years ago. Trump's order has driven down U.S. cattle ‌prices, angering ranchers and reducing the value of inventories that meat companies previously purchased.

"The revised outlook is primarily driven by significant margin compression amid volatile cattle prices and one of the most severe cattle shortages in U.S. history," Tyson said in a statement. The adjustment was also due to "the expected impact of lower cattle prices on the value of live cattle inventories," the ⁠meatpacker said. SHARES ​TUMBLE

Tyson now expects fiscal 2026 adjusted ⁠operating income of $1.85 billion to $2.05 billion, compared with $2.1 billion to $2.3 billion it forecast on August 3. It also expects fiscal 2026 revenue growth of 1.5% to 2.0%, compared with ⁠2.5% to 3.5% expected last month. Shares were down about 7%. Shares of meatpackers Smithfield Foods and Pilgrim's Pride were down about 2%.

"We view today’s guidance reduction as further ​evidence that near-term beef conditions have remained more challenging than previously anticipated despite the company’s aggressive capacity actions," Stephens analyst Pooran Sharma said. Tyson shuttered ⁠a massive beef plant in Nebraska this year and slashed operations at another facility in Texas. In August, Tyson said it would also close or sell three of its beef plant and ⁠packaging ​operation sites. The actions should begin reducing operating cost pressures as the company enters fiscal year 2027, CEO Donnie King said.

“The beef pressures that have intensified this quarter reflect industry-wide cattle-cycle dynamics that required decisive action,” he said. CAUTIOUS CONSUMERS

Beef prices soared after a persistent drought in the western U.S. burned ⁠up grazing lands and forced ranchers to reduce their herds. Washington further tightened supplies over the past year by suspending cattle imports from Mexico in ⁠an attempt to keep out a flesh-eating ⁠livestock pest. However, consumers are cautious about discretionary spending, Tyson said, creating a more difficult environment for demand at foodservice outlets.

Consumer goods companies have increasingly faced resistance from budget-conscious shoppers, particularly lower-income households that have gravitated toward cheaper, private-label and value ‌brands.