BTG Pactual expects Tyson Foods to report a difficult fiscal second quarter, with its beef division posting an operating loss as the US cattle cycle goes through its worst downturn in decades. The situation has already led JBS, Tyson and Cargill to close plants in the country.
The deterioration of the US cattle cycle has few recent precedents. The total cattle herd has fallen to its lowest level since 1952, according to the USDA. Prolonged drought in the western part of the country increased feed costs, reduced grazing areas and forced producers to liquidate part of their herds. In 2025, beef production fell 4% from the previous year to 11.8 million tonnes, costing the US its position as the world’s leading beef producer, which was taken over by Brazil.
Against this backdrop, BTG projects revenues of US$ 5.38 billion for Tyson’s beef division, but an adjusted operating loss of US$ 210 million, equivalent to a margin of -3.9%. For the company as a whole, the bank forecasts revenues of US$ 13.9 billion, adjusted EBITDA of US$ 812 million and adjusted net income of US$ 311 million.
According to analysts Thiago Duarte and Guilherme Guttilla, the main protein cycles in Brazil and the US are deteriorating simultaneously this year, eliminating the buffer that diversified companies traditionally had during periods of crisis.
Chicken remains Tyson’s main source of profitability, although it is showing signs of losing momentum. BTG projects revenues of US$ 4.41 billion for the division, with an operating margin of 11.3%, below the previous quarter. Prices have already begun to retreat from their recent highs.
The prepared foods division is expected to generate revenues of US$ 2.57 billion, with a margin of 13%, while the pork operation would record a margin of only 3%. BTG and Santander agree that the unfavourable beef cycle will extend through 2028.
Source: Exame
