Tyson Foods has cut its fiscal 2026 profit forecast for the second time in roughly a month, highlighting the growing impact of the U.S. cattle shortage on the meat industry. The downgrade comes despite elevated beef prices, as meat processors face sharply higher costs for scarce cattle and weaker spending by price-sensitive consumers.

Beef Losses Become the Central Earnings Pressure

Tyson now expects fiscal 2026 adjusted operating income of $1.85 billion to $2.05 billion, down from its previous $2.1 billion to $2.3 billion forecast issued in August. The company also reduced its expected revenue growth to 1.5%–2%, compared with its earlier projection of 2.5%–3.5%.

The largest deterioration is coming from the beef segment. Tyson expects an adjusted operating loss of $625 million to $775 million for fiscal 2026, compared with its previous estimate of $500 million to $650 million. The company said the revision reflects significant margin compression caused by volatile cattle prices and one of the most severe cattle shortages in U.S. history.

The pressure illustrates a difficult dynamic for meat processors: high retail beef prices do not necessarily translate into stronger profitability when the underlying cost of livestock rises faster than selling prices.

Cattle Shortage Reshapes the Meat Industry

The beef market is being affected by a prolonged contraction in the U.S. cattle herd, limiting the supply available to processors. Tyson also expects lower cattle prices to reduce the value of live cattle inventories it has already purchased, adding another source of pressure to fourth-quarter results.

The broader industry has been responding by reducing processing capacity. Tyson has announced plant closures and plans to sell another beef facility as it seeks to align its operations with tighter cattle supplies and the current phase of the cattle cycle.

At the same time, consumer behavior is becoming another consideration. Persistent inflation and elevated food prices have encouraged some households, particularly lower-income consumers, to shift toward less expensive protein options. That makes it more difficult for food companies to fully pass higher input costs through to consumers.

Chicken and Pork Offer Partial Support

Tyson’s difficulties are not evenly distributed across its portfolio. The company continues to benefit from stronger performance in chicken and prepared foods, which have provided an important counterweight to weakness in beef.

For fiscal 2026, Tyson expects adjusted operating income of $1.85 billion to $1.95 billion from chicken and $200 million to $250 million from pork. Both forecasts were reduced from the company’s previous outlook, indicating that the latest revision is broader than beef alone, although beef remains the dominant source of deterioration.

Tyson’s first nine months of fiscal 2026 generated $41.83 billion in sales and $1.62 billion in adjusted operating income. The company entered the final quarter with liquidity of about $4 billion and had reduced total debt by $824 million, providing some financial flexibility as it manages the downturn in beef.

The immediate market reaction underscored investor concerns. Tyson shares fell about 7% following the revised outlook, while other meat and consumer-food stocks also faced pressure.

Going forward, investors will be watching cattle availability, livestock prices, consumer demand and the pace of Tyson’s capacity reductions. The company’s ability to offset beef losses through chicken, prepared foods and operational efficiencies will be particularly important as management enters fiscal 2027 with the cattle cycle still weighing on the industry.