Key Takeaways:

With cattle supplies historically tight and packer margins deeply negative, beef processors are reducing excess slaughter capacity, with decisions over which plants to close driven by cattle availability, operating efficiency, and the ability to maintain high utilization rates. Proximity to major cattle-feeding regions provides packing plants with an important advantage, but Tyson’s closure of its Lexington, Nebraska facility demonstrates that location alone cannot protect a plant when low utilization and overlapping processing capacity make consolidation more economical. Plant efficiency is driven more by facility design, technology, and operating costs than age alone, with less efficient plants at greater risk of clo...