SPRINGDALE, Arkansas: Tyson Foods lowered its annual profit forecast on August 3, saying losses in its beef business are expected to widen as tight U.S. cattle supplies continue to drive livestock costs higher.

The warning highlights the ongoing pressure on U.S. meat producers, which have struggled as rising cattle costs outpace increases in beef prices. Earlier this year, Tyson closed a major beef plant in Nebraska and reduced operations at a Texas facility, resulting in thousands of layoffs.

U.S. cattle supplies have fallen to a 75-year low after prolonged drought damaged grazing lands in the western United States. Supplies were further constrained after Washington suspended cattle imports from Mexico to prevent the spread of the New World screwworm pest.

The Trump administration has said it plans to begin lifting the import ban this month, but Tyson executives said the move will not provide immediate relief.

"The reopening of the Mexican border will not solve the entire gap of beef losses we are currently seeing," CEO Donnie King said during a conference call. He added that restarting imports could lead to some improvement in 2027 and beyond.

Chief Operating Officer Wes Morris said imported feeder cattle will still need time to graze or be fattened in feedlots before they are ready for slaughter, meaning benefits could take up to a year to materialize.

Tyson now expects fiscal 2026 adjusted operating income of US$2.1 billion to $2.3 billion, down from its previous forecast of $2.2 billion to $2.4 billion.

The company also widened its projected adjusted operating loss for its beef business to between $500 million and $650 million, up from its earlier estimate of $350 million to $500 million.

"Beef hasn't performed the way we expected, and we're not pretending otherwise," King said.

Beef sales volumes fell 15.9 percent in the quarter ended June 27, while prices rose 12.1 percent.

Higher beef prices have prompted some consumers to switch to cheaper proteins such as chicken, helping offset part of the weakness in Tyson's largest business. Chicken sales volumes increased 1 percent during the quarter, while adjusted operating margin in that segment rose 11.2 percent.

Tyson said it expects "another constructive year" for its chicken business in 2027.

The company reported quarterly sales of $13.87 billion, below analysts' estimate of $14.12 billion, and forecast annual revenue growth of 2.5 percent to 3.5 percent, compared with analysts' expectation of 4.3 percent.