Tyson Foods, the nation’s largest meat supplier, has announced it will close its beef processing plant in Lexington, Nebraska, by January 20, 2026—a move expected to lay off more than 3,200 workers and send ripples through the American beef industry. The decision, coming amid a historic shortage of cattle and mounting political scrutiny, underscores the deep challenges facing U.S. meatpackers as they navigate drought, skyrocketing costs, and intensifying regulatory pressure.
According to The Independent, Tyson’s closure of the Lexington facility is the first among the so-called "Big Four" beef processors to shutter a plant in direct response to the ongoing cattle supply crunch. The company stated that the move was designed to "right-size its beef business and position it for long-term success"—a nod to the harsh realities facing the sector. U.S. pastures now hold the fewest cattle since the 1950s, the result of a punishing combination of drought, pandemic disruptions, rising feed and labor costs, and even pest infestations. Despite these hardships, consumer demand for beef has remained robust, driving livestock prices to record highs and squeezing processor margins to the breaking point.
Financially, the pain is clear. In its recently ended 2025 fiscal year, Tyson reported an adjusted loss of $426 million on its beef operations. Company officials warned investors that losses could deepen, forecasting operating shortfalls between $400 million and $600 million for the current fiscal year. The squeeze has been exacerbated by nearly a year of tariffs on U.S. beef exports imposed during the Trump administration—tariffs that were only lifted in early November 2025, according to The Independent.
The closure has drawn sharp criticism from Nebraska officials, who fear the economic and social fallout for Lexington and the state’s ranching communities. The Nebraska Cattlemen Board of Directors, in a statement to the Nebraska Examiner, declared, “We firmly believe there isn’t a better place to efficiently and economically raise cattle and produce beef than Nebraska. This will have a profound impact on the community of Lexington and many cattle producers.”
State Senator Teresa Ibach told KRVN she is actively exploring whether another buyer might take over the facility, hoping to stave off the worst of the economic blow. Senator Deb Fischer, herself a rancher and a member of the Senate Agriculture Committee, voiced her frustration, saying, “Nebraska is the beef state, and we know better than anyone the highs and lows of the cattle market. It’s no secret that just a few years ago packers like Tyson were making windfall profits while the rest of the industry was continuously in the red.”
The plant’s closure comes as the broader beef industry faces not only market headwinds but also growing political scrutiny. Earlier this month, President Trump—under pressure to address persistent inflation—publicly accused major meatpackers of artificially inflating prices and urged the Department of Justice (DOJ) to open an investigation into possible collusion, price fixing, and price manipulation. In October 2025, the president even floated the idea of importing more beef from Argentina to help lower prices for American consumers, a move that would have been unthinkable in previous years.
The DOJ’s investigation, launched at the president’s request, zeroes in on the so-called "Big Four" meatpackers: JBS, Cargill, Tyson Foods, and National Beef. These companies now control a staggering 85% of the U.S. beef processing market, a figure that has more than doubled since 1980, when their combined share stood at just 36%. This concentration of market power has sparked concerns among lawmakers and industry advocates alike.
Representative Dusty Johnson, speaking to KOTA Territory News, voiced his support for the DOJ’s probe. “Anytime you’ve got four big packers controlling 85 percent of the market, that should always be a cause for concern. When you’ve got that much market power, it is relatively easy for you to act in a way that does not help consumers, and so I absolutely support making sure that the Department of Justice looks deeply into these behaviors,” Johnson said.
Johnson pointed to the Packers and Stockyards Act, a century-old law intended to preserve competition and integrity in the livestock, meat, and poultry markets. “The Packers and Stockyards Act does provide some protections for the American independent cow-calf producer and the consumer, but it only works if we use it,” he added. The White House, for its part, alleges mounting evidence that the big packers have slashed payments to ranchers, reduced herd sizes, and driven up prices for consumers—claims that, if substantiated, could have major implications for the industry’s future.
For rural communities like Lexington, the plant closure is more than just a business decision—it’s an existential threat. The loss of over 3,200 jobs will reverberate through local schools, businesses, and service providers, potentially hollowing out a town that has long relied on Tyson as an economic anchor. Local leaders and state officials are scrambling to mitigate the damage, but the prospects remain uncertain.
Meanwhile, the national debate over meatpacking concentration and food security is heating up. Critics argue that the dominance of a handful of mega-processors has made the nation’s food supply more vulnerable to shocks, whether from disease outbreaks, supply chain disruptions, or market manipulation. Supporters of industry consolidation, on the other hand, contend that large-scale operations are necessary to keep costs down and ensure consistent supply for a country of over 330 million people.
The current crisis has also exposed the delicate balance between producers, processors, and consumers. Ranchers, squeezed by low payments and rising costs, have struggled to stay afloat, while packers like Tyson have seen their fortunes swing wildly from boom to bust. Consumers, meanwhile, face higher prices at the grocery store—with little insight into the forces driving those increases.
As the DOJ investigation unfolds, all eyes will be on Washington to see whether regulators will take meaningful action to address the power of the Big Four and restore balance to the beef industry. For now, though, the closure of Tyson’s Lexington plant stands as a stark reminder of the challenges—and the stakes—in America’s heartland. The coming months will determine whether the industry can adapt to new realities, or whether more communities will face the same uncertain future as Lexington.
