By Tom Polansek

CHICAGO, Jan 23 (Reuters) - Tyson Foods TSN.N will temporarily continue to prepare beef for sale at a slaughterhouse it is closing in Lexington, Nebraska, the meatpacker said on Friday, offering a short reprieve to 9% of the facility's 3,200 workers.

The company said in November it would close the beef plant around January 20 as tight cattle supplies raised costs for U.S. processors.

In a new notice to Nebraska officials this week, Tyson said layoffs began on that date but that it would extend the employment of about 292 workers for three to 185 days to perform duties related to the plant's closure. Less than half of those employees will remain past the end of the month.

"Limited further processing will continue at our Lexington facility during this transition period," Tyson said in an emailed statement.

U.S. cattle supplies dwindled to their lowest level in nearly 75 years after a persistent drought dried up pastures used for grazing and drove ranchers to reduce their herds.

Low inventories, coupled with strong demand for beef from consumers, pushed retail ground beef prices to a record high of $6.69 per pound in December, a 19% increase from a year earlier, according to the Bureau of Labor Statistics.

President Donald Trump in October said he was working to bring down beef prices, but prices for hamburger meat and steaks continued to creep higher.

Though high prices benefit Tyson, the company has also had to pay record prices to buy cattle to slaughter.

In Nebraska, government officials have hoped that Tyson will sell the plant or find another use for it to minimize economic damage to Lexington, which has about 10,000 residents. Tyson has said the Lexington beef complex has been in operation since 1990.

(Reporting by Tom Polansek; Editing by Aurora Ellis)

((Thomas.Polansek@thomsonreuters.com))