Meatpacker Stocks Rise on Hope of More Cattle

People shop the meat section at a supermarket in Alhambra, Calif., in September.

Key Points

• Meatpackers like JBS and Tyson Foods are experiencing significant losses in their beef processing segments due to high cattle prices.
• Signs of herd rebuilding, such as increased retention of female cattle, suggest a potential future increase in cattle supply.
• Live cattle futures have decreased by 15% since mid-October, and JBS and Tyson stocks have risen by 13% and 9% respectively.

Tight cattle supply has pushed beef prices to a record high over the past few years. As signs of herd recovery start to emerge, investors are getting optimistic about lower cattle costs in the future. Meatpackers like JBS and Tyson Foods could benefit from the turn of cycle.

Meatpackers are losing millions of dollars processing beef amid record high prices. Drought and rising costs on everything from labor to equipment have pushed American ranchers to scale back the size of their herd, leading to tight cattle supplies.

Meatpacking companies buy cows and sell beef to make profit from the price difference. Although they have been raising beef prices sharply, it isn’t enough to cover the soaring costs of cattle. Consumers tend to switch to chicken or pork if beef becomes too expensive.

In the first nine months of 2025, the North American beef business of Brazilian meat processor JBS posted $566 million in adjusted operating loss, at a 2.8% loss margin. The beef segment of Tyson lost $426 million for the 12 months ended in September, at a 1.9% loss margin.

Tyson announced last week that it plans to close a major beef-processing plant in Nebraska. The closure could hurt beef production and drive up prices even more.

But there are signs of a turn of cycle. Tyson CEO Donnie King said on an earnings call this month that in some regions like the Upper Midwest, an increasing share of young female cows are being retained for future breeding rather than sent to slaughter.

A JBS executive also noted on the company’s recent earnings call that there was a significant decline in cow slaughter in the third quarter, indicating a retention of female cattle to rebuild the herd.

With herd rebuilding, the supply of cattle for slaughter will fall before it increases in future years. That means beef supplies will remain tight and prices stay high in the near-term.

Still, traders have already started pricing for a future with more abundant supply. As of Thursday, live cattle futures are trading around $2.08 per pound, down 15% from their recent peak in mid-October, according to data from Trading Economics.

That means beef prices will likely start to decline as well, but to a lesser extent, which would allow meatpackers to have better profit margins. Investors have turned bullish already: Over the past month, JBS stock has gained 13%, while Tyson shares increased 9%.

There are more tailwinds to come. The U.S. imports large amounts of beef from foreign countries like Brazil. Last week, the Trump administration exempted dozens of imported agricultural goods, including beef, from the tariffs imposed earlier this year—a move that could help cool down the high prices.

Write to Evie Liu at evie.liu@barrons.com