The US beef industry is in the midst of one of its largest two-year declines in beef production. This will have significant ramifications for everyone from consumers to cattle producers. Consumers will face higher retail prices than they did in 2023. Beef processors will struggle to make money unless they get a lot more for their beef than they did at the end of last year. Cattle feeders will see sharply higher live cattle prices because of the reduction in cattle supplies due to ongoing beef cow herd liquidation. This will make it even harder for packers to make money this year.
This year could be even more challenging for packers than 2023 because US cow-calf producers continue to reduce their herds. Packers and analysts had expected to see signs of a rebuild of the beef cow herd early last year as prices for all classes of cattle began to move higher. But those signs did not materialize, as Donnie King, Tyson Foods’ president and chief executive officer, told analysts last November. His remarks came after Tyson reported that its beef segment had an operating loss of $323 million in its fourth quarter ended Sept. 30, against income of $375 million in the fourth quarter of 2022. This meant an operating loss for fiscal 2023 of $91 million, versus income of $2.502 billion. This was Tyson beef’s first annual loss since 2015, when it reported an operating loss of $66 million. Its previous biggest loss was $244 million in 2006.
01.17.2024
By Steve Kay
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