Beef Shock: Tyson's Major Plant Closure Sends Ripples Through Town and Cattle Market

Tyson Foods, one of the country’s major meat producers, has decided to shut down its large beef processing facility in Lexington, Nebraska, with the closure set to take effect in January. The company says the move is part of an effort to scale its beef business to match the ongoing national shortage of cattle, but it will eliminate roughly 3,200 jobs in a community of only about 11,000 people.

The Lexington operation, capable of handling roughly 5,000 cattle per day, has long been an important part of the U.S. beef supply chain. Its shutdown, combined with Tyson’s earlier decision to eliminate one of the two work shifts at the Amarillo, Texas, plant—impacting an estimated 1,700 employees—will remove around 7% to 9% of the country’s beef processing capacity. Tyson plans to increase throughput at its other plants in an attempt to offset the loss of production from these sites.

Local leaders described the decision as a severe blow to Lexington. Since opening in 1990, the plant helped transform the town, drawing newcomers from around the world and nearly doubling the population. Community members, including religious and civic leaders, warn that the region’s economy revolves heavily around Tyson and that the closure will strain local businesses. The company has offered transfers to other Tyson facilities, but many affected workers would need to move long distances. The decision drew criticism from Nebraska officials, with Governor Jim Pillen remarking that the state “took a major hit,” though he expressed optimism that the aging facility—originally built for another purpose—might eventually be reused for a specialized agricultural business, such as bacon production or niche beef processing.

The shutdown reflects the financial pressure Tyson faces in its beef division. The company is contending with the smallest U.S. cattle herd in roughly seven decades, contributing to an adjusted operating loss of $426 million last fiscal year and an anticipated loss this year estimated between $400 million and $600 million. Industry analysts note that older plants are difficult to justify in a sector that increasingly relies on advanced technology and higher efficiency. Persistent drought conditions and harsh winters have reduced cattle numbers by harming reproductive rates, pushing live cattle prices upward. Consumers have felt the impact as well: beef and veal prices have climbed more than 10% over the past year. Economists say the immediate effect on retail prices from this closure may be modest, but ranchers could face greater uncertainty without a major buyer in the region. That hesitation is compounded by rising beef imports—especially from Brazil—which accounts for about a quarter of all U.S. beef imports so far this year.