news release Oklahoma Farm Report radio network
Oklahoma City, OK — Senior farm and ranch broadcaster Ron Hays speaks with livestock market economist Dr. Derrell Peel about Tyson Foods’ recent announcement about shutting down its Lexington, Nebraska, beef plant and downsizing operations in Amarillo. This news follows months of losses in its beef division, driven largely by the smallest U.S. cattle herd in decades. Tyson Foods’ recent announcement about shutting down its Lexington, Nebraska, beef plant and downsizing operations in Amarillo. This news follows months of losses in its beef division, driven largely by the smallest U.S. cattle herd in decades.
Dr. Peel explained that the closure was not entirely unexpected within the industry. As he noted, “I’ve been getting questions for months from producers. Everybody was aware that this was a possibility.” With cattle numbers extremely tight, packers have operated far below capacity and “have been unable to operate at anywhere close to full capacity,” leading to sustained financial losses. According to Peel, the combined changes at the two Tyson plants represent a “seven to eight thousand head per day loss of packing capacity… probably somewhere in the range of seven and a half to nine percent of total U.S. packing capacity.”
While plants tend to operate regionally, Peel emphasized that cattle flows respond to market pressures. He acknowledged that cattle can travel substantial distances when numbers are low, remarking that “when numbers get tight… fed cattle will travel significant distances. It’s not as efficient to do that.”
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