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Tyson Foods on Monday said it was anticipating a continued shift by some consumers from beef toward cheaper chicken.
“Looking forward, we expect cattle supplies to remain tight as we move into 2026. During this period, chicken is likely to benefit most from changing consumer preferences, both at retail and in food service,” said Donnie King, chief executive officer, in a conference call with analysts.
“2026 presents further opportunities for our chicken business. Chicken is an affordable, high-quality protein, and our innovative value-added offerings position us uniquely to serve both retail and food service customers amid high beef prices,” King said.
Tyson’s beef business produced a net adjusted operating loss of $94 million in the fiscal fourth quarter, widening from a $71 million loss the same period a year ago. That’s in contrast to its chicken business, which saw a net adjusted operating gain of $457 million, up from $356 million in the same period last year. Total net adjusted operating income grew to $608 million for the quarter from $512 million last year.
Tyson said it expects total revenues to grow by 2% to 4% in fiscal 2026. Shares ended 2.3% higher on Tuesday, but have lost 6.2% in the year to date.
Tyson’s beef business has suffered due to rising livestock costs, but King noted demand for beef has remained resilient.
“Protein remains a top priority for shoppers. Despite rising prices, beef, pork, and chicken are clear favorites, with consumers viewing protein as an essential purchase and continuing to buy meat,” King said.
Devin Cole, Tyson’s chief operating officer, told analysts that chicken is poised to be the best value protein for consumers in the face of sticky food inflation, while warning that supplies may be tighter in the near term.
“We continue to believe we may be seeing the initial stages of heifer retention. Any retention is likely to further restrict cattle supply in the short run before seeing more supply as we work our way further through the cattle cycle a few years out,” he said.
Quotable
Progress toward an end to the longest federal government shutdown in history was credited with giving a lift to grain and livestock futures, along with broader markets on Monday. The Senate cleared a key hurdle Sunday night after a group of Democratic senators broke ranks to join Republicans in advancing a measure to reopen the government.
“I view the U.S. government reopening as the end of a negative, not an incremental positive as it should never have closed to begin with, especially with a clean continuing resolution in hand,” said Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, in a note.
Notable closes
December live cattle rose $7.20 to $228.55 to end near the daily high, while January feeder cattle rose the daily trading limit of $9.25 to $328.825. Trading limits in both cattle futures markets will be expanded on Tuesday. Traders will be looking for follow-through in coming days to build hopes that a near-term bottom is in after the sharp pullback from mid-October highs.