Tyson Foods cut its fiscal 2026 beef outlook again, moving against signs of improving conditions for U.S. meatpackers as lower cattle prices begin to ease a prolonged margin squeeze.
The warning also contrasts with a more optimistic view from Brazilian rivals JBS and MBRF, which have pointed to increased cattle supplies from Mexico and lower livestock costs as potential drivers of a recovery in their U.S. beef operations.
The revised forecast mainly reflects significant margin compression amid volatile cattle prices, Tyson said. The U.S. industry has been struggling with a historic shortage of cattle available for slaughter.
Demand is becoming another concern. U.S. consumers had continued buying beef despite high prices, but inflation appears to be taking a toll.
“Consumer caution around discretionary spending has made the demand environment more challenging in foodservice,” Tyson said in a statement.
Tyson also lowered its consolidated operating income forecast to between $1.85 billion and $2 billion. Just a month ago, the company had already cut its guidance to a range of $2.1 billion to $2.3 billion.
Tyson shares fell more than 7% in New York following the announcement. JBS shares fell 3%, while shares of MBRF, which controls National Beef in the U.S., declined 0,7% on the São Paulo stock exchange.
Industry Margins Improve
Tyson’s deteriorating outlook comes just as industry indicators point in the opposite direction.
U.S. beef packer margins are estimated at a positive $0.29 per kilogram in the third quarter, compared with a loss of $0.36 per kilogram in the second quarter, according to UBS.
UBS said the improvement was driven by a 9% decline in cattle prices during the quarter, which more than offset a 4% drop in beef prices. The calculation uses USDA wholesale beef prices and live-cattle futures traded in Chicago.
U.S. cattle prices are now at their lowest level of the year, down 21% from a late-June peak, according to UBS.
The decline comes as the U.S. reopens to cattle imports from Mexico, potentially increasing the supply of animals available for slaughter. Measures to increase beef supplies have also included authorization for 300,000 metric tons of tariff-free imports.
Brazilians’ view
Tyson’s warning stands in contrast to recent comments from executives at JBS and MBRF, the Brazilian company which controls National Beef in the U.S.
Executives at both Brazilian companies said last month that the resumption of Mexican cattle imports could help improve results by increasing the availability of animals for slaughter.
That divergence may suggest JBS and MBRF are better positioned to capture the benefits of an improving cattle-supply environment.
Bank of America said in a report two weeks ago that the outlook for U.S. meatpackers was beginning to turn, adding that MBRF could benefit directly from Tyson’s decision to close a beef plant in Illinois.
Goldman Sachs also said it expects JBS to outperform the broader market, citing what it sees as more disciplined capacity decisions as well as lower cattle prices.
“At current prices, JBS trades at a 5% discount to Tyson,” Goldman Sachs analyst Thiago Bortolucci said in a report on Thursday.
The comparison is based on comparable 2026 EV/Ebitda multiples before Tyson’s latest guidance revision. Goldman recommends buying JBS shares.
Tyson Takes a Different Path
For Tyson, however, the improvement in industry indicators has yet to translate into a better outlook.
“The beef headwinds that intensified this quarter reflect industry-wide cattle-cycle dynamics and required decisive action,” Chief Executive Officer Donnie King said in a statement.
Last month, Tyson announced a restructuring of its beef operations that is expected to reduce its U.S. slaughter capacity by about 20%. King said those changes should begin lowering operating costs next year.
Stephens analysts said the latest guidance cut was further evidence that near-term conditions for Tyson’s beef business remain more challenging than previously expected, despite the company’s aggressive capacity reductions.
This story was translated from the original Portuguese with the assistance of artificial intelligence and reviewed by The AgriBiz editorial staff.
