Pressure Builds on Beef Packers

Low cattle numbers are beginning to reshape the U.S. beef packing industry. In his latest newsletter, Oklahoma State University Extension livestock marketing specialist Derrell Peel outlines why the sector is under pressure and what it could mean moving forward.

Peel explains that most U.S. beef packing capacity was built between the 1960s and 1980s, when the national cattle herd was 20 to 30 million head larger than it is today. Because these facilities require major investments and long-term planning, the industry cannot quickly adjust when cattle supplies decline.

Instead, changes tend to happen gradually through plant closures. Over the past 25 years, several major plants have shut down, including facilities in Kansas and Texas. The most recent announcement from Tyson includes the closure of its Lexington, Nebraska plant and a reduction in capacity at its Amarillo, Texas facility in 2026.

Peel says packers adjust to tighter cattle supplies by reducing Saturday slaughter, which fell to just 1.2 percent of total slaughter in 2025, the lowest level in the past 30 years. With cattle inventories expected to remain tight, further industry adjustments may still lie ahead.