Tyson Foods raises forecast for annual beef loss as volumes fall

USA – Tyson Foods has lowered its expectations for beef profitability in fiscal 2026 as a shortage of cattle weighs on production volumes and margins.

The US meat producer now expects its beef division to post an adjusted operating loss of US$500 million to US$650 million for the year, compared with its previous estimate of US$350 million to US$500 million.

The weaker beef outlook has also led Tyson Foods to reduce its forecast for total adjusted operating income, which is now expected to fall below the previously projected US$2.1 billion to US$2.3 billion range.

The company had previously forecast group adjusted operating income of US$2.2 billion to US$2.4 billion when it reported its second-quarter results in May.

Tyson Foods said beef margins continued to come under pressure from higher cattle costs as fewer animals were available for processing.

The supply constraints have affected the wider US beef market, where limited cattle numbers have contributed to higher prices for consumers.

Tyson Foods president and chief executive Donnie King said earlier this year that cattle availability was expected to remain tight through 2026 and into 2027.

The pressure was reflected in the company’s third-quarter beef volumes, which declined 15.9% year on year, while volumes for the first nine months fell 12%.

Beef losses remain a drag

Tyson Foods recorded a US$142 million operating loss in beef during the third quarter, compared with a US$459 million loss a year earlier, while the nine-month loss was US$701 million against US$707 million previously.

On an adjusted basis, the beef division’s operating loss widened to US$138 million from US$116 million in the third quarter and reached US$483 million for the first nine months, compared with US$223 million a year earlier.

The adjusted operating margin for beef stood at negative 2.6% in the third quarter, compared with negative 2.1% a year earlier, while the nine-month margin was negative 2.9% against negative 1.4%.

Beef sales fell to US$5.39 billion in the third quarter from US$5.60 billion, although nine-month revenue increased to US$16.37 billion from US$16.13 billion.

Tyson Foods also lowered its overall annual sales growth forecast to between 2.5% and 3.5%, compared with its earlier range of 2% to 4%.

Group revenue was flat at US$13.87 billion in the third quarter, while nine-month sales rose 3.1% to US$41.83 billion.

Despite the pressure from beef, group operating income increased 39% to US$362 million in the quarter and rose 17% to US$1.1 billion during the first nine months.

Prepared foods provided another source of growth, prompting Tyson Foods to raise its annual sales outlook for the division to between US$1.30 billion and US$1.35 billion from US$1.25 billion to US$1.35 billion.

Prepared foods revenue reached US$2.56 billion in the third quarter, up from US$2.52 billion a year earlier, while nine-month sales increased to US$7.74 billion from US$7.38 billion.

Chicken also continued to perform strongly, with third-quarter sales reaching US$4.26 billion compared with US$4.22 billion a year earlier, while nine-month revenue rose to US$12.75 billion from US$12.43 billion.

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