Tyson Foods, the largest meatpacking company in the US, announced last week that it is closing two facilities in Iowa and Utah. The company will also sell a beef facility in Washington state, resulting in hundreds of layoffs.
This move comes as the supply of cattle in the US has hit a 75-year low. The historic shortage is attributed to a multi-year drought, rising costs, and economic pressures, including consolidation among cattle ranchers.
Despite beef prices soaring over the last year due to the shortage, economists believe these specific Tyson plant closures are unlikely to significantly impact consumer prices. Agricultural economists Glynn Tonsor and Josh Maples suggest the US has had excess capacity for processing beef, meaning operations will likely be rerouted.
Tyson's third-quarter earnings earlier this month reported a 15.9% decrease in beef volume and a $138 million beef operating loss.