Closure of Tyson Foods Plant Threatens Lexington's Economy

Wed Nov 26 2025 02:57:59 GMT+0200 (Eastern European Standard Time)

Tyson Foods' decision to close a significant beef processing plant in Lexington, Nebraska, threatens the livelihood of local residents and challenges ranchers nationwide amidst rising beef prices and shifting market dynamics.

The impending closure of Tyson Foods' beef plant in Lexington, Nebraska, which employs nearly one-third of the town's population, may have devastating effects on the community and the broader cattle industry. While short-term beef prices may remain stable, the long-term impact could exacerbate price increases. The shutdown raises concerns for local businesses and first-generation entrepreneurs dependent on the plant's economic stability.

OMAHA, Neb. — Tyson Foods’ decision to close a beef processing plant in Lexington, Nebraska, could result in catastrophic consequences for this small city and ranchers nationwide. The Lexington facility, which employs about 3,200 individuals in a town of 11,000, has the capacity to slaughter up to 5,000 cattle daily. Additionally, Tyson plans to eliminate jobs at another plant in Amarillo, Texas, further contributing to a national reduction in beef processing capacity by 7-9%.

While consumers may not immediately see significant changes in grocery prices due to existing cattle supplies being processed elsewhere, the long-term forecast suggests beef prices could rise even higher than current record levels, influenced by factors such as drought and trade tariffs, unless American ranchers increase cattle production, which they currently lack the incentive to do.

The potential increase in beef imports from Brazil, following President Trump’s recent tariff reductions, may temporarily ease consumer prices while U.S. cattle producers grapple with high costs and lower market prices.

A ‘Gut Punch’ to the Community

According to Clay Patton, vice president of the Lexington-area Chamber of Commerce, Tyson's announcement was akin to a “gut punch” for a community historically reliant on the plant since its opening in 1990, which almost doubled the town’s population by attracting immigrant workers. The closure scheduled for January threatens to disrupt local businesses and community investments, with Tyson offering relocation options to remaining employees for jobs at other plants.

“The economy in Lexington is based in Tyson,” said local pastor Elmer Armijo, highlighting community fears over job security, education, and healthcare systems at stake.

Cattle Prices Respond to Market Changes

The closure also threatens to diminish confidence in the cattle market, possibly leading to further declines in cattle prices, already exacerbated by increasing Brazilian imports contributing to 24% of the beef market in the U.S. this year. Bill Bullard from the Ranchers-Cattlemen Action Legal Fund states there is a prevailing reluctance among ranchers to invest in their herds amid these uncertainties.

Glynn Tonsor, an agricultural economist at Kansas State University, indicates it remains unclear if beef imports will maintain their current share of the U.S. supply, as fluctuating tariffs and shifting market conditions complicate forecasting.

Tyson's Ongoing Struggles

Despite facing ongoing losses in its beef division—over $600 million projected this year with a cumulative loss of $720 million in the last two years—Tyson's plant closures reflect a broader industry trend of excess slaughter capacity. Economists believe that the Lexington facility's inability to keep pace with technological advancements essential for profitability contributed to its downfall.

“It’s very difficult to renovate or make the old plant fit the new world,” stated Ernie Goss, an economist at Creighton University.