Tyson Sees Flat 2026 Profits Even With Beef Prices at Record

Tyson Foods Inc. said it expects profits to be little changed next year as its beef segment continues to lose money, even as the Trump administration points to the meatpacking industry for driving up prices.

The US’s shrinking cattle herd is still dragging on the profitability of the country’s biggest meatpacker, and supplies are only set to become more strained near-term as ranchers will need to hold back more animals from the meat supply to rebuild herds. Higher demand for chicken, Tyson’s second-largest source of revenue, again helped offset fourth-quarter beef losses.

“The beef segment remains our only soft spot,” Chief Executive Officer Donnie King said on a Monday call with analysts. “Looking forward, we expect cattle supplies to remain tight as we move into 2026. During this period, chicken is likely to benefit most from changing consumer preferences.”

The company’s shares were up 1.3% as of 11:36 a.m. in New York.

Tyson sees adjusted operating income of $2.1 billion to $2.3 billion for fiscal 2026, compared to $2.29 billion this year. That’s as the beef segment is expected to see an adjusted operating loss of $400 million to $600 million next year, compared to $426 million this year.

Bloomberg's Jennifer Bartashus joins to discuss.

Profits in beef, Tyson’s biggest segment, continue to be pressured by a severe cattle shortage, which has driven up prices and constrained volumes. Fourth-quarter adjusted operating margins for beef were -1.6%, better than analyst expectations, though volumes tumbled 8.4%.

Consumer beef prices have jumped to record highs, drawing the ire of President Donald Trump, who said Friday that he had asked the Justice Department to start an investigation into the meatpacking industry, pointing to “majority foreign owned” companies for driving up prices. The industry has long faced bipartisan scrutiny for being too concentrated, resulting in an antitrust probe late in Trump’s first term and a Biden-era initiative allowing producers to report unfair trade practices.

But beef companies haven’t profited much from the current pricing surge. Meatpackers on average have been losing money for every head of cattle processed for most of this year, according to data from HedgersEdge. Those losses are expected to continue into next year, according to a Friday statement from Julie Anna Potts, chief executive officer of the lobbying group Meat Institute.

The process of rebuilding herds, which requires ranchers to hold onto more female cows for reproduction, also means the “supply of market-ready cattle will fall before it increases,” King said on a call with analysts on Monday. There is some retention of heifers in the upper Midwest region, though the company is not seeing “anything meaningful” in other regions, he said.

Tyson said in August that the company doesn’t expect to benefit before 2028 from a push to rebuild herds.

Meanwhile, analysts and investors have been watching for signs that consumers’ appetite for chicken may be peaking. Prices for that protein have been softening in the industry.

Tyson’s chicken pricing was flat in the fourth quarter, but a bigger-than-expected jump in volumes supported adjusted operating income of $457 million, up 28% from 2024. The company’s increased focus on value-added products for retail and food service has provided “some insulation,” but the company is “not immune” to movements in those markets, King said.

The chicken segment’s fourth-quarter results are “probably the main positive surprise,” JPMorgan analysts Thomas Palmer and Elsa Evans wrote in a note. Barclays analysts including Benjamin Theurer said profits were better than expected for the quarter because of chicken, while losses in beef were “only marginally worse than a year ago.”

Tyson’s adjusted earnings per share in the fourth quarter of $1.15 beat analyst expectations, while sales of $13.86 billion were slightly lower than estimates.

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