The U.S. meat industry is grappling with supply constraints.

Cattle supply is at its lowest levels since 1951 as the number of farms and ranchers have dwindled since 1980. Moreover, ranchers, who have endured years of droughts and rising costs have little incentive to increase supply.

Meanwhile, stabilizing supply through imports has been disrupted due to tariffs.

These combinations have led to more expensive beef, which now costs $6.30 dollars per pound. And consumers aren’t the only ones bearing the burden.

Tyson Foods (TSN), one of America’s biggest meat-packaging firms is feeling the squeeze as well as higher beef prices have led to higher operating losses.

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The U.S. meat industry is currently facing an unfavorable combination of tight supply and strong demand. 

Demand for beef has risen steadily over the past years due to changing consumer preferences, as Americans are increasingly turning to beef products and higher quality meat as part of their diet.

Unfortunately, supply hasn’t kept pace with surging demand due to multiple factors.

For starters, the number of cattle farmers and ranchers have steadily declined since 1980 and since 2017, the U.S. has lost more than 150,000 ranches. Consequently, supply has declined to its lowest level since 1951.

Ranchers have had little incentive to expand their herds after enduring years of low prices, droughts, and skyrocketing costs. With supply dwindling, many cattle ranchers have seen better prices and returns, further reducing the incentive for increased supply.

Imports have been used to bolster supply, with 16% of beef sourced from overseas producers last year. However, the administration’s tariff policy has made meat more expensive, as it has imposed levies amounting to 50% on Brazil—by far the largest exporter of beef to the U.S.

As a result, beef prices have soared to record highs of $6.30 dollars per pound. And with the cost of living rising, Americans are starting to turn to less expensive sources of protein like chicken or pork, whose prices have risen much more slowly than beef.

However, consumers aren’t the only ones negatively impacted by skyrocketing beef prices.

Tyson Foods (TSN), one of America’s biggest meat-packaging firms is feeling the squeeze as well.

The company, along with JBS, Cargill, and National Beef collectively process roughly 85% of the U.S. meat supply. In addition to beef, the company processes pork and chicken and owns a portfolio of brands such as Tyson, Jimmy Dean, State Fair, and others.

Tyson Foods primarily distributes its products to grocery and restaurant chains, as well as schools, hospitals, to overseas customers, and even nursing homes.

Due to low supply and high prices, the company’s beef segment has suffered, and has lost as much as $94 million during the fourth quarter of its 2025 fiscal year. Management is expecting an operating loss between $400 million and $600 million in its beef segment in fiscal year 2026.

The company also sold roughly 8% fewer pounds of beef during the same quarter even though prices are up 17% as cattle costs rose to around $2 billion. 

This isn’t the first time Tyson Foods has been hurt by rising livestock prices. Two years prior, the company’s returns nosedived amid rising egg and poultry prices when an avian flu swept through chicken populations in the U.S.

Uniform accounting provides a clearer picture of Tyson’s recent struggles.

After seeing its Uniform return on assets (“ROA”) soar to 17% levels in 2022, the firm’s returns declined steeply to 2% in 2023 amid the avian flu outbreak. Last year the company’s ROA rebounded to 6% levels, still well below historical profitability.