By Scout Nelson
The United States cattle herd has fallen to its lowest level in more than 75 years, creating challenges across the beef industry. Industry experts say the decline in cattle numbers could increase the risk of additional beef packing plant closures if supplies remain limited.
Several years of drought have damaged pasture conditions in many parts of the country. As a result, many ranchers have reduced herd sizes and sold more cattle than usual. While these actions help producers manage difficult conditions, they also reduce the number of animals available for processing.
Earlier this year, Tyson Foods closed its beef processing facility in Lexington, Nebraska, citing difficult market conditions. The closure affected more than 3,000 employees and had a major impact on the local economy of the community.
The closure also highlighted concerns about the structure of the U.S. beef processing industry. A large portion of the nation’s beef processing capacity is controlled by four major companies: Tyson Foods, JBS, Cargill, and National Beef. Because a small number of large facilities process a significant share of cattle, the loss of one plant can affect workers, producers, and local communities.
Researchers from the University of Nebraska recently examined how cattle supplies affect beef processor profitability. Their findings suggest that large packing plants depend on high operating volumes to remain financially successful. When fewer cattle are available, plants may struggle to maintain profits.
“When this decrease in profitability is large enough and expected to continue, firms may decide to permanently close a plant to reduce their fixed costs (which include plant infrastructure, machinery, and technology) and utilize their remaining capacity more efficiently,” writes Jake Smith, an assistant professor at the University of Nebraska and one of the authors of the study.
Recent reports show that Tyson, JBS, and National Beef have experienced losses in their beef divisions in recent years. Lower cattle numbers continue to create challenges for processors throughout the industry.
According to USDA data, about 47% of U.S. beef was processed in only 11 plants during 2025. This concentration highlights the importance of maintaining stable cattle supplies to support processing facilities, employment, and beef production across the country.
Photo Credit: gettyimages-rosshelen
Categories: Nebraska, Livestock, Beef Cattle, Weather