Tyson Foods is adjusting its beef production strategy to navigate the challenges of record-low cattle availability, while keeping up with resilient consumer demand for protein.
In the quarter ending June 28, the company experienced a “noticeably tighter” cattle supply compared to last year, as demand for beef remains robust, driven by a growing appetite for protein, according to CEO King.
To maximize output, Tyson slowed down processing speeds, a move aimed at improving yield performance across its plants. Chief Supply Chain Officer Brady Stewart confirmed that this strategy is likely to continue, given its success in optimizing available cattle.
From January to June, slaughter rates for cows were down by 16%, an early sign of heifer retention. This practice, which involves keeping young female cattle for breeding rather than sending them to slaughter, is expected to impact cattle numbers in the coming years.
King anticipates that ranchers will begin rebuilding herds “in earnest” by 2026, with the benefits of heifer retention becoming more apparent by 2028.
Aside from herd management, weather has contributed to the tight beef supply, with the prolonged drought affecting the beef cycle, according to Stewart.
Despite recent tariffs on Brazilian beef, Stewart noted that they have yet to affect prices at the store, citing the significant delay before tariffs impact retail prices.
In response to these market conditions, Tyson has successfully cut over $100 million in controllable costs from its beef segment this year. “We are managing this market environment with discipline, controlling what we can across the supply chain to meet customer needs,” King added.
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