Key facts
- Tyson Foods lowered its annual profit forecast due to rising cattle costs and reduced beef volumes.
- The company now expects fiscal 2026 adjusted operating income between $2.1 billion and $2.3 billion.
- Tyson Foods forecasts an operating loss of $500 million to $650 million for its beef business.
- Mexico's largest meat exporter, SuKarne, is exploring a sale valued at over $2 billion.
- U.S. cattle inventories are at a 75-year low, impacting the beef industry.
Tyson Foods has lowered its annual profit forecast, anticipating increased losses in its beef segment due to high cattle costs and reduced volumes. The company now projects fiscal 2026 adjusted operating income between $2.1 billion and $2.3 billion, a reduction from its prior outlook. The beef business is expected to incur an operating loss of $500 million to $650 million, an increase from previous estimates. These challenges stem from U.S. cattle inventories reaching a 75-year low, driven by drought and elevated feed costs, which have also contributed to record-high U.S. beef prices and squeezed industry margins.
In parallel, SuKarne, Mexico's largest meat exporter, is reportedly exploring a sale that could value the company at over $2 billion. SuKarne, which spans cattle feeding, meat processing, and distribution, is working with Rabobank and BBVA on the sale process. The U.S. had previously banned Mexican cattle imports due to pest concerns, a restriction that has since been phased out, impacting the beef industry. SuKarne's businesses include beef, chicken, and pork, with a significant presence in Mexico and exports to over 13 countries.
Tyson's third-quarter sales of $13.87 billion fell short of analyst expectations, while beef volumes decreased by 15.9%. The company's chicken segment, however, showed resilience with 1% sales volume growth and an 11.2% adjusted operating margin.