Tyson Foods experiences recurrent challenges in beef segment
USA – Tyson Foods has reported that it anticipates another difficult year for its beef division, its largest revenue generator, as persistent drought in the U.S. impacts cattle supply.
The unfavorable weather conditions have reduced the number of cattle available for slaughter, a factor outside the company’s control.
In fiscal 2024, which ended on September 28, Tyson reported a 1.6% increase in beef volumes and a 6% rise in revenue, totaling US$20.5 billion.
Despite these gains, the Arkansas-based meat producer expects continued losses in adjusted operating income (AOI) for the beef segment in 2025, with projected losses ranging from US$200 million to US$400 million.
During a conference call with analysts on November 12, Brady Stewart, Tyson’s chief supply chain officer and president of its beef and pork division, described the current environment as one of the most complex the industry has ever seen.
“This is one of the most dynamic beef environments in history,” Stewart said, noting record-high cut-out prices and weights as unique factors in the cattle cycle.
In 2024, Tyson’s beef division posted a US$291 million loss in AOI, a sharp decline from a $233 million profit in 2023.
CEO Donnie King attributed the losses to compressed profit margins and the challenging cattle cycle, which shows no signs of herd rebuilding.
“The challenges persist,” King said, emphasizing the company’s focus on controllable factors amid the downturn.
While the beef segment faces ongoing headwinds, Tyson expects growth in its chicken and pork divisions.
Chicken AOI is projected at US$1-1.2 billion for 2025, up from a US$77 million loss in 2023, while pork AOI is forecast at US$100-200 million.
Prepared Foods is expected to remain steady, with AOI estimates between US$900 million and US$1.1 billion.
Looking ahead, Tyson plans to shift its product mix toward branded, value-added items and leverage digital tools to enhance decision-making and consumer engagement.
The company projects flat to slightly positive group AOI for 2025, with total sales expected to remain stable at approximately US$53.3 billion.
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