Tyson Foods announced it will close its large beef plant in Lexington, Nebraska, in January and scale back operations at its Amarillo, Texas, facility due to declining U.S. cattle supplies.

The shutdown affects about 3,200 workers in Nebraska and 1,700 in Texas, though Tyson says it will help employees find positions elsewhere and offer relocation support.

The company said consolidating operations will help maintain production while U.S. cattle inventory sits at a 70-year low, driving beef prices sharply higher.

Despite strong consumer demand, Tyson’s beef division has posted significant losses—$426 million in the year ending Sept. 27 and more projected for fiscal 2026, Fox Business has reported.

Rising beef prices, drought-driven herd reductions, and a multi-year cattle production cycle continue to strain supply and raise costs.