Meat processing giant Tyson Foods has reduced its annual profit forecast, as persistently climbing cattle prices continue to pressure its earnings.

The ongoing shortage of cattle supply in the US has raised production costs for processors like Tyson and JBS, leading to significant losses. Tyson reported that cattle procurement costs increased by $575 million year-over-year in the current quarter. Rising raw material costs have pushed retail beef prices to new highs, dampening demand amid already strained consumer finances.

For its fiscal third quarter, the Arkansas-based Tyson disclosed a $142 million loss in its beef segment. While the average selling price of beef products rose nearly 12% year-over-year, sales volume fell 16%. The company now expects an adjusted operating loss of $500 million to $650 million for its beef business, wider than its prior forecast of a $300 million to $500 million loss.

In the three months ending June 27, Tyson posted a net profit of $182 million, up from $61 million in the same period last year. Adjusted earnings per share of 99 cents slightly exceeded Wall Street analysts' consensus estimate of 98 cents, according to FactSet data.

Tyson's chicken, beef, and pork products account for roughly one-fifth of total US market sales. Quarterly revenue was flat year-over-year at approximately $13.87 billion, falling short of analyst expectations.

In pre-market trading, Tyson shares declined by about 3.8%.

As a bellwether for the US meat industry, Tyson has relied on its chicken business over the past year to stabilize overall profits. Strong demand for chicken breasts and frozen nuggets, coupled with low raw material costs for broilers, boosted earnings. However, in recent months, an oversupply of broilers in the industry has steadily compressed margins in the chicken processing segment.

Tyson has lowered its fiscal 2026 adjusted operating income forecast from a prior range of $2.2 billion to $2.4 billion to $2.1 billion to $2.3 billion.