Tyson Foods announced the closure of its Lexington, Nebraska fed cattle facility and streamlining of its Amarillo, Texas plant, eliminating over 4,900 jobs and reshaping beef packing capacity as the Trump Administration investigates major packers for price-fixing.
Tyson Foods announced the closure of its kill plant and processing facility in Lexington, NE. The plant reportedly had capacity to slaughter and process up to 5,000 head of fed cattle per day, though actual daily kill was likely far below that figure. Plant operations are expected to fully wind down by the end of January, sending more than 3,200 workers to the unemployment line.
Tyson also announced it would be streamlining its Amarillo, Texas plant, costing another 1,700 jobs as it adjusts to a single, full-capacity shift.
This news comes right on the heels of heightened scrutiny on beef packers from the Trump Administration, which issued guidance to the Department of Justice to investigate the four largest packers for “price-fixing” and “collusion.”
The November Cattle on Feed report showed placements of 2.04 million head, down exactly 10% from the same month last year, slightly lighter than the average analyst guess but not quite as sharp of a decline as LEAP Market Analytics was projecting.
The cattle/beef complex remains buoyed by incredibly restrained domestic beef production and very strong but increasingly suspect demand. This reordering of the supply chain would shrink the pathways for fed cattle to be marketed.
LEAP’s very early reaction to these developments is to change the fed beef price outlook very little despite fairly significant reduction in packing capacity; however, the outlook for cattle markets, including everything from fed steers and heifers back upstream to weaned calves, has been trimmed noticeably.
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