Tyson Foods is expecting to post a steeper annual loss in beef than was originally anticipated as cattle shortages persist.
Reporting third-quarter and nine-months results today (3 August), the US meat giant updated its guidance for adjusted operating income losses for its beef segment in fiscal 2026 to a range of $650-500m.
As a consequence, total adjusted operating profit for the group business is now predicted to be below previous expectations at $2.1bn to $2.3bn, compared to the $2.2bn to $2.4bn outlined at the second-quarter results stage in May.
At that point, beef was forecast to deliver a loss in operating profit of $350-500m.
In an accompanying presentation issued alongside today’s numbers, New York-listed Tyson Foods noted beef margins were “pressured by higher cattle costs, driven by lower cattle availability”.
Shortages of cattle have plagued the US beef industry, while prices on-shelf for consumers have continued to rise.
In February, when Tyson Foods issued its first-quarter results, its president and CEO Donnie King said cattle supplies are likely to remain “tight” through 2026 and into next year.
Tyson Foods also took a hit to beef volumes in the third quarter and year to date, while the operating margins for the segment remained in the red.
Beef volumes dropped 15.9% for the quarter and 12% over the nine months.
The company reported a loss in operating profit of $142m for beef versus a loss of $459m in the corresponding period a year earlier. Year-to-date losses were little changed at $701m, compared to a $707m loss.
On an adjusted basis, losses in operating income for the quarter in beef widened to $138m from $116m and over the nine months to $483m from $223m.
The operating margin was a negative 2.6%, improving from a negative 8.2% a year earlier.
For the year so far, the margin was minus 4.3% versus a negative 4.4%.
In adjusted terms, the third-quarter margin was minus 2.6% versus minus 2.1% a year earlier. It was a negative 2.9% year to date compared to a negative 1.4% in the corresponding period.
Tyson Foods has also tweaked its annual sales revenue growth guidance for the group as a whole to a range of 2.5% to 3.5%, from 2% to 4% previously.
On a brighter note, the sales outlook for the Arkansas-based company’s prepared foods business was beefed up to $1.30-1.35bn. The prior outlook was $1.25-1.35bn.
King, who is giving over the president and CEO seats to Jeff Schomburger in October, said in today’s results statement: “We delivered strong third-quarter results, fueled by continued strength in our chicken and prepared foods segments, with seven consecutive quarters of growth in chicken and continued market share gains by our iconic brands.
