US Beef Shortage: Tyson Foods CEO Sounds the Alarm
The US cattle herd is at its lowest level in 75 years, and the beef supply is struggling to meet consumer demand. According to the USDA, the country’s cattle herd has declined to a 75-year low, resulting in record-high beef prices. In Tyson Foods’ fiscal third quarter, beef volume dropped 15.9% while prices rose 12.1%.
In an effort to alleviate the shortage, the US Department of Agriculture (USDA) will reopen the Douglas, Ariz., port of entry for cattle trade on August 24. However, Tyson Foods CEO Donnie King has cautioned that this move will not fully solve the US beef shortage.
King emphasized that the company is not waiting passively for the cattle cycle to turn. Instead, Tyson Foods is focusing on improving the variables within its control to mitigate the impact of the shortage. The company’s Chief Operating Officer, Wes Morris, estimates that it could take up to a year for the industry to see a positive impact from the reopening of the border.
The border reopening won’t have a material impact on the remainder of this fiscal year, which ends in September. However, it could provide the potential for improvement in 2027 and after. To put this into perspective, the USDA has suspended cattle imports through the southern border in November 2024 and again in mid-2025 due to concerns about the spread of the New World screwworm.
Every animal entering the United States through these ports will undergo a full USDA inspection to ensure it is free of any signs of New World screwworm. The USDA has assured ranchers that the inspections will be thorough and effective in preventing the spread of the parasite.
Not only is Tyson Foods feeling the pinch of a tighter cattle supply, but many restaurant chains are also struggling to keep up with the demand. In a note to clients, TD Cowen analyst Andrew Charles highlighted that Texas Roadhouse (TXRH) is the biggest beneficiary of the border reopening, followed by Chipotle (CMG), LongHorn Steakhouse owner Darden Restaurants (DRI), Chili’s parent Brinker International (EAT), and Shake Shack.
Charles also noted that there’s reason to believe the worst of beef inflation is in the past due to declining grocery demand and the removal of tariffs in November 2025. Reducing beef prices has also become a bipartisan issue, as beef and veal still face rising inflation, with the latest CPI print showing prices up 11.8% year over year.
