Closing of Tyson Foods Plant Threatens Lexington's Economy and Cattle Industry

Wed Nov 26 2025 06:20:32 GMT+0200 (Eastern European Standard Time)

The impending closure of Tyson Foods’ beef plant in Lexington, Nebraska, threatens not only the livelihoods of its workers but could also ripple through the national cattle industry, potentially driving up beef prices amidst an already challenging market.

In a move set to affect over 3,200 jobs in Lexington, Nebraska, Tyson Foods announced the closure of its beef processing plant, sparking fears about the future of the local economy and the cattle industry. With fewer processing jobs and increasing imports from Brazil, the U.S. beef market faces rising uncertainties and potential price hikes, further strain on ranchers, and a deeply impacted community.

OMAHA, Neb. — Tyson Foods’ decision to close a beef plant that employs nearly one third of residents of Lexington, Nebraska, could devastate the small city and undermine the profits of ranchers nationwide.

Closing a single slaughterhouse might not seem significant, but the Lexington plant employs roughly 3,200 people in the city of 11,000 and has the capacity to slaughter some 5,000 head of cattle a day. Tyson also plans to cut one of the two shifts at a plant in Amarillo, Texas, and eliminate 1,700 jobs there. Together those two moves will reduce beef processing capacity nationwide by 7-9%.

Consumers may not see prices change much at the grocery store over the next six months because all the cattle that are now being prepared for slaughter will still be processed, potentially just at a different plant. However, in the long run, beef prices may continue to climb even higher than the current record highs — caused by a variety of factors from drought to tariffs — unless American ranchers decide to raise more cattle, which they have little incentive to do.

An increase in beef imports from Brazil, encouraged by slashing tariffs, may help insulate consumers while ranchers and feedlots struggle with high costs and falling prices.

A ‘gut punch’ to the community

Clay Patton, vice president of the Lexington-area Chamber of Commerce, described Tyson’s announcement as a “gut punch” to the community, highlighting that the plant was a critical component of local agricultural infrastructure.

When the plant opened in 1990, it revitalized the dwindling town by attracting immigrants and nearly doubling the population. Its closure in January will have ripple effects throughout the community, affecting businesses and new housing investments.

“I’m hopeful that we can come through this and we’ll actually become better on the other side of it,” Patton stated.

Cattle prices falling in response

The prospect of losing a major buyer for cattle, alongside increased imports from Brazil, raises doubts about the profitability of the U.S. cattle industry. Bill Bullard, president of Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America, stated, “There’s a just a lack of confidence in the industry right now.”

Boosting imports from Brazil could impact the market significantly, especially as the nation already accounts for a substantial portion of U.S. beef imports. However, consumers may continue to pay high prices for beef as these imports typically consist of lean trimmings.

Tyson faces continued losses in the beef business

Tyson Foods anticipates losing over $600 million on beef production this year and has reported significant losses over the past two years. With excess capacity in the meat business and new competition emerging, the closure of the Lexington plant may lead to increased efficiency at Tyson's remaining facilities.

Ernie Goss, an economist, mentioned that the Lexington facility likely wasn't competitive in terms of productivity, indicating that significant changes are necessary for survival in the current market.