NASHVILLE, TENN. (RFD-TV) — Tight fed cattle supplies are already straining packer margins, and the coming shutdown of Tyson’s Lexington, Nebraska, beef plant will further shift how slaughter capacity is used nationwide. Dr. Charley Martinez, Assistant Professor at the University of Tennessee Institute of Agriculture, analyzed the expected impact using updated 2025 slaughter and utilization data.
The Lexington facility accounts for roughly 5,000 head per day — about 20 percent of Tyson’s total daily capacity. Removing that volume raises national capacity utilization (CU) closer to historical levels. Martinez’s adjusted model shows 2025 CU improving from 83.1 percent to 87.7 percent, nearer the five-year average of 90.1 percent.
Operationally, November CU fell to 83.5 percent, well below last year and historical norms. The adjustment suggests the industry currently holds more physical capacity than available cattle supplies can support.
Regionally and historically, this marks the largest major-plant closure since Cargill shuttered Plainview in 2013 amid similar tight-supply conditions. Martinez notes that new facilities expected in 2026–27 could reshape CU again, depending on herd rebuilding.
Looking ahead, the key uncertainty is whether today’s adjusted CU represents a short-term imbalance or a longer-run structural shift.
Farm-Level Takeaway: The Lexington shutdown pushes national slaughter capacity utilization nearer long-run averages, underscoring how tight cattle supplies are reshaping packer operations.
Tony St. James, RFD-TV Markets Specialist
From “right to repair” to investigations into the “Big Four” meatpackers, antitrust issues were a major legal topic in 2025 and promise to have a long-term impact on the agriculture industry in the future.
January 15, 2026 12:05 PM
·
Tight beef cow supplies and steady demand point to continued record-level cull cow prices in 2026.
January 15, 2026 11:23 AM
·
Expanded school access to whole milk provides modest but reliable demand support for U.S. dairy producers.
January 15, 2026 10:14 AM
·
The American Farm Bureau Federation’s 2026 agenda centers on labor stability, biosecurity, and economic resilience for family farms. Expanded DMC coverage improves risk protection for dairy operations facing tighter margins.
January 14, 2026 11:19 AM
·
A high-stakes legal case in a South Dakota federal court concerning misleading country-of-origin labeling (MCOOL), such as “Product of the USA,” on food products, will significantly impact U.S. agricultural policy for years to come.
January 14, 2026 09:00 AM
·
Secretary Rollins also met with specialty crop producers at a local strawberry farm to discuss workforce needs and the Trump Administration’s recent wins related to significantly cutting the cost of H-2A labor for California farmers.
January 13, 2026 03:25 PM
·
China’s beef policy risk stems from domestic volatility, making export demand inherently unstable. Jake Charleston with Specialty Risk Insurance offers his perspective on cattle markets, risk management, and producer sentiment.
January 13, 2026 02:13 PM
·
Structural efficiency supports cattle prices and resilience — breaking it risks higher costs and greater volatility.
January 13, 2026 08:00 AM
·
Strong pork demand and improving beef exports outside China support protein markets despite ongoing trade barriers.
January 13, 2026 06:00 AM
·
